11 AAC 83.228. Choice of methods for determining reasonable costs of transportation

(a) Except as provided in (b) of this section, the reasonable cost of transportation is the actual cost of transportation as determined in 11 AAC 83.229.

(b) The reasonable cost of transportation is the fair market value as defined in 11 AAC 83.229, when all of the following conditions exist:

(1) the parties to the transportation of oil or gas are affiliated;

(2) the contract for the transportation of oil or gas is not an arm's-length transaction or is not representative of the market value of the transportation; and

(3) the method of transportation of oil or gas is not reasonable in view of existing alternative methods of transportation.

History: Eff. 11/9/79, Register 72

Authority: AS 38.05.020

AS 38.05.180

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