Opinion ID: 184925
Heading Depth: 1
Heading Rank: 3

Heading: challenges to the new settlement

Text: 16 The petitioners make multiple arguments challenging the valuation of specific cuts and FERC's failure to require that qualitative differences between the same cuts of different streams be considered when determining the relative value of each stream. They argue that FERC acted arbitrarily by failing to value resid based on its marginal use as a fuel oil blend stock instead of as a coker feedstock; improperly failed to account for differences in quality among the the same cuts of different streams when valuing resid; improperly chose a price proxy for its value as a coker feedstock; and failed to address challenges to the methodology for determining resid's value as a coker feedstock. The petitioners also challenge FERC's decision to implement the new valuation methodology prospectively only. We address first the valuation challenges, and uphold the agency's decisions as supported by substantial evidence with the exception of the use of FO-380 less 4.5 cents and 3 percent sulfur No. 6 fuel oil less 4.5 cents as proxy prices for heavy resid. The adjusted valuation solves none of the problems we identified in our prior opinion because there is no evidence that the prices of the reference products, even after the 4.5 cents adjustment, bear any rational relationship to the market value of resid. We therefore vacate and remand the portion of FERC's order affecting the valuation of heavy resid.