i do not believe that there is any reasonable way to read the jurisdiction sections of the i c a section one point one one point two and one point three not to be clear that there are only related to common carriers gauge in federal congress section one one states the act covers only common carriers and gauge the federal transportation one two it's what explicitly excludes state transportation from the that there was no acquisition within the meaning of five two there was a question as regulating the acquisition of one bus line by another bus lin situation where fergus is doing something that it needs to do for federal regulation and inadvertently crosses over the line has to impact state karmas do it this is a case in fact quite the on federal costs so for now for it to go in and decide that in order to achieve that purpose at the cross over it's hard to regulate state commerce there's no reason for that so no i don't believe the incidentally  i wanted to mention that that to all the specific enabling statues of the i c a are interpreted within the context of the jurisdictional provisions of one one three one three in the language of five one specifically provide interstate commerce at that so that's a red herring that issue is not decided we there may be no state laws whatsoever but it doesn't mean that per can then occupy the field that it was express conflict with state law is the appropriate standard at all not the only other to do this and not the most economically rational way you should be taking account of all the costs the the most economically rational way is to take into consideration well i was saying that the specific provisions of the i c a have consistently been interpreted with the jurisdictional sections for example  just a reasonable federal rate one has no why is that i think because if there is a disparity under the federal rates you separate out you do jewish pixel separation basis  separate the the the federal rates on and on federal costs so from the book from the foundation up you are only taking into consideration you allocate those in the case of caps their jurisdiction to a very basis depending on whether their distance or non distance related costs so the agencies go through and have for decades really got to separate the cost of the two buckets now if the rates established in the mechanism their argument would be you need to federally pool you don't need to go look in the other bucket you didn't pay charades in those other buckets there's no reason to believe that other bucket for any reason at all and if there's a problem with your rate setting in the federal all with regard to which estate in which is federal conners there is no dispute in this case nor the underlying basis as to how the allocation should be done between cost allocation should be done between state and federal co morning your honour's of the cell of the commission what the commission had before it was a settlement agreement that it found that the statutory and regulatory standards for approval the pooling settlement would minimize over or under recovery of costs and it at the same time would provide ample incentive for the carriers to discount this was not what petitioner was intimating that it's in the commission is forcing this on the nose while in five o two the commission did say that it did want to rule and that's not what it is that before the commission the court here was before the court here is a voluntary ruling greenman that was presented that includes just like happened in the one nine hundred eighty five this is a voluntary agreement with the interstate carriers right about the interesting they are both the interstate and the intrastate carriers they they happen to be both it's all there the only carriers on this pipeline those same people so they are interstate carriers as judge wilkins was pointing out and there are if you look at section one one b it says the provisions of the in the transportation of oil by pipeline so that that is who these taps carriers are they are carriers and therefore then when you turn to i see section five one it says it provides a  stateroom i will say that they as we pointed at as we pointed out in our brief they did not raise that issue to the commission at all they certainly had notice of that issue and commission didn't have an opportunity to address that but but it in any event it's it's not correct it is the provision that i was just reading to the court section costs certain intrastate costs after movements have already occurred on that the fictional interest state side of the pipeline so the alaska is still setting the rates for those movements alaska still setting the rules under which those movements occur and it's only after those movements occur that in order to address the skewing that would occur otherwise now again the commission didn't say you need to include the or over recovery because you can be a carrier who over a carver's on the interstate side but undercover is on the interstate side and so you end up not resolving the under or over cover over recovery to the extent the commission wants to it doesn't want to fully resolve the over under recovery because it wants to leave this incentive for the tax carriers to discount and so it leaves out it approves the settlement that leaves out twenty five point one percent matter are indispensable exactly and i'm just trying to understand why that's what they've explained to me and i think you know my colleague can explain that a little bit better about the skew because again that wasn't really that wasn't a commission the commission wasn't finding this is necessary it was fine it was necessary to consider these costs to end up with a j n r settlement and it did do that but it didn't propose it on its own i don't know what the commission would have done if it had on its own set of willing and said whether it would include it or not but what if found was it was reasonable to do that here particularly because alaska wasn't upset but i think it's about him i want is a matter i'm sorry it really matters because a lot because alaska is really active to support and in tax case jurisdiction they recognize that it doesn't affect their jurisdiction for example in order thirty four that cited in the briefs the two thousand and four alaska order alaska was asked to include the intrastate pool in cost that were included into to act in the one nine hundred five settlement in alaska said we're not going to include those in your in your rates in determining what your rate should be so where it could have impacted the states rates the rate the states still have the ability to say no we're not going to include those someone recognized that this is very similar to that at last and those are for ninety five f thirty six sixty three and three o six third eleven twelve and that involved the city of vernon which was a non jurisdictional entity that wanted to be the commission came back in this second case which was transmission agency case and said we're going to use the j in our standard and we're actually going to look at these non first fictional entities great because they affect the federal  included here i have i think you said i created b i think the reason i keep bringing that up is because it was something that was presented to the commission as a settlement this is what we tax carriers have decided we think is necessary for us to have the appropriate recovery not too much under cover not too much over recovery and retaining the incentive to continue to discount at the same time so then the commission looked at what was presented to it found that created the pool is what i'm saying and i don't want to speak for the commission is them saying this must be in there as precedent that you always have to include it but in this particular circumstance you know tax is weird it's unique it's not like a trial staff object to this and i remember  correctly for the trial staff originally thought that not only intrastate rate should be ended but that other rates portions of the cost shouldn't be as well that they but they changed their mind then and did not oppose the settlement agreement all there was all kinds of stuff the proposal that was really at issue in the here at the hearing level was essentially full cost and that's what all the testimony was about and and course that's nothing like what's been proposed here which you know and as the commission found this is virtually circumstance where you have you have one pipeline that has multiple carrier owners you don't really know who's running what you don't know where you're getting your so there's this fiction that's created that says all right these are interested volumes these are interstate volumes i think th i don't want to say confusion is not refuse this is complicated in this is odd it's not like a regular pipeline where you really understand who's who's pipeline it is and what it serving so these tax carriers are intrastate carriers and interstate carriers but they are for sure section one one b carriers for purposes of this chapter and therefore section five one applies and allows them to include their intrastate r i think my point is they're always an interest rate carrier and perhaps they're always in intrastate carrier i don't know but they're always an interesting carrier it's just sometimes there are volumes are not going in intrast the commission would not for sure here say that it could then take another step and determine that it has to look actually at the rates i mean it's not even doing the same thing you did in p g an environment so it's a step closer it's just considering the costs because it's necessary to make sure that there's proper prevention of all remember coverage and let's not forget why that matters i mean that is really the whole premise how do we keep tax going for the future that benefits everybody these carriers if they continue to under recover they're not going to continue to want to invest in towns and that's not a help anybody just will be around  in response i believe to a some of the questions that already occurred i think it's important to step back and look categorically after what this settlement involves pooling does not involve the setting of rates neither on the federal side at fir or on the state side with the alaska commission hoolan evolves after rates have been set after volumes  series of payments and receipts between the carriers to address the fact that the ownership of caps doesn't align with the revenue collection of the owners that disconnection that divergence creates cost over recoveries and under recoveries among the period and that is exacerbated with the uniform rate requirement that was mandated what this settlement does it says that for seventy five percent of the costs and back of questioning your honor raised about how much of the interstate intrastate costs are pooled it's the same in both under the settlement proposal it would be seventy five percent of the interstate costs and seventy five percent of the intrastate costs are pool those don't affect how her or the alaskan commission set race for the carriers interstate or intrastate what it goes to is a of revenue among the carriers the pooling of that revenue to not completely resolved as council said but to mitigate that difference which has long term benefits in terms of financial stability of taps and investment incentives for the task carriers so it's important to i want to start off by making that distinction your honor as your question about interstate versus intrastate i'm very sympathetic having practice in this area long time interstate jurisdiction is something you can spend a lot of time on in taps the reason that this interest entirely inside the state of alaska movements get separated is because shippers nominee and for those shippers who nominate down to the values terminal to go outside the it reinforces this point your honor because the uniform race the reason the uniform rates matter whether you're talking on interstate or the end prostate side is that it limits the ability it limits the ability that carries carriers to vary their rates to address these disconnects between cost in currents and cost recovery so it is it's a factor here fundamentally the reason that it goes to i think the point that a number of questions have raised is that in doing in approving the settlement pool burke is not attempting to regulate intrastate commerce and let me explain myself it is not attempting to regulate how the alaska commission chooses set rates the costs that were being discussed by by respondents counsel were cause were in fact those cooling paints a carriers with that kind of carrier seek to recover in their rates interstate or intrastate the painless they were making deal with that divergence in cost and currency and cost recovery has any effect on the pool of costs for running taps that are recognized in setting the rates it is a transaction between the carriers after the fact readjusting revenue and not all of it i want to make one point about the exclusion that i think is crucial we talk about is a twenty five percent exclusion this is not so much the percentage which is substantial it means the carriers are only a and i'm sorry i'm running out god thank you be carriers are only to assure to the boot process seventy five percent of their costs the twenty five percent we're talking about what matters is one of the categories of those costs there's t entirety of a cost that each of the carriers incur directly in managing taps what's called a carrier direct cost those are entirely excluded incurred by each of the carriers the other huge category is the entirety of the carriers return is excluded that's what creates the incentives for the carriers to continue to compete if a carrier sat back and said i'll just take my cooling payment all that means is incentives you know for the question transporting in federal commerce under one one is not such a regulation to make that even more clear under one two it specifically excludes transportation only within the state which is what we're talking about here and to make not limited and it has been applied by one so first let's not confuse under their theories of the i c s jurisdictional sco there's nothing that would prevent her from starting to set r because these are common carriers that just inadvertently are moving that are regulated under the act like it work to start regulating state commerce the reason they regulating the interest rates i don't see that implication from the position well  i think that if you take a look at the ice and we can make that clear as well but i don't see why that necessarily follows from their position well their position is that carriers are carriers and it doesn't matter what they're doing  and the i c a provides for regulation that's their position and if that's true then carriers there's all the carriers are definitely evolved in interstate commerce correct yes well common times no i know but s t r yes they're involved in interstate commerce and the point is that what what costs are going to be pooled in terms of setting the interstate rate absolutely that's the issue right in setting the federal rate there's no reason to even if they're interested carriers in it's interstate raising questions just what components what things are we go pooling quarter one hundred percent of my plants state oil was moved on a competitive rate one hundred percent after this order one hundred percent of my client's state oil is being moved on a noncompetitive rate that's been the impact here this isn't you know they say there how did that happen tell me how did that happen well we learned that hearing that if the pooling was permitted that there would not be competitive rates for say commerce if hooligan polluted state costs so that's what happens they have no incentive to compete there was a there was a robust competitive environment on pap's for state commerce and first set a federal rate and then said they needed the pool if they had said we're going to who'll federal costs there may have been some collateral effect on commerce that would fall under the incidental or collateral type of analysis but when you go in and say we're setting  unnecessarily to get to a just a reasonable federal rate you don't even need to look at those costs and no one has worked to kill a did a reason why they should will they you know they have to prevent over under recovery right you know you disagree with that say well the state has a problem too so let's go poor over there just like they can't disregard their rates they can't they can't go into that commerce and regulate that commerce it's not incidental it's not accidental it's direct  i wanted to be clear the alaska commission specifically allows individual rates to be filed and doesn't have a uniform rate requirement and that's another reason why state puling makes no sense at all  thin thread of justification for pulling which is inherently unlawful is uniform raids on the stateside there aren't you for marines i argued for uniform rates in the stateside and i lost and in there misreading that order terribly i lost in what the what the r c a said was if you want individual rates come in and file them and in fact they haven't filed an individual rape of they've had a right to for a decade now if there's any harm arising out of uniform rates it should have been apparent and they should have filed individual rights they've had individual rights and the fact that they've had the opportunity to file individual rights for a decade on the state side and they haven't filed them once so this is so and then i think it's also important aside from that tired decade where they could have filed individual rates and did that from ninety two thousand and eight so few thousand and twelve there was no plan there was no pool there hasn't been any impact on taps operation and part of the problem is that first has not articulated they just when you talk about the five one standards of benefit there has been no benefit to service there hasn't been any change in the service whatsoever there hasn't been an economy of operation the economy of operation as  only does this take cost from the most efficient provider and given to the least efficient provider that's also called competition and and pooling just undoes that and then with regard to the undue impact