April 5, 2019 / 6:14 PM / 2 months ago

Shippers on SFPP pipelines say rate hikes to cost them $5.3 mln

NEW YORK, April 5 (Reuters) - Shippers on Kinder Morgan's SFPP fuel pipeline system, including Valero and HollyFrontier, have complained to U.S. regulators that rate increases to ship on the system were unlawful, costing an estimated $5.3 million in past and future damages.

Last May, SFPP, which operates refined-product lines in the U.S. southwest and west coast, filed index-based rate increases on several of its pipeline segments. The shippers said the increases were unjust because SFPP was over-recovering its cost-of-service at the time of the increases, according to the complaint filed late Thursday with the U.S. Federal Energy Regulatory Commission.

Kinder Morgan is developing a response to the complaint and will file it with FERC by May 6, spokeswoman Katherine Hill said.

Shippers named in the complaint were American Airlines Inc , Chevron Products Company, HollyFrontier Refining & Marketing LLC, Southwest Airlines Co and Valero Marketing and Supply Company.

Valero claimed it has overpaid or will overpay SFPP for the rate increases by about $2.1 million for the 2018 index year, the highest amount of the shippers listed.

"Each of the complainants has been harmed by paying these unjust and unreasonable rates and is entitled to damages measured by their overpayments during the relevant time period," the complaint said.

The shippers want FERC to rescind the rate increases and order SFPP to refund them.

SFPP transports refined products through Texas, New Mexico, Arizona, California, Nevada and Oregon. (Reporting by Stephanie Kelly; Editing by Richard Chang)

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