Title 11 . Natural Resources

Chapter 83 . (No Regulations Filed)

Section 244. Pricing of materials and supplies

11 AAC 83.244. Pricing of materials and supplies

Material purchases, transfers and dispositions by a lessee for use on a NPSL must be priced according to the following standards:

(1) Material purchased must be charged at the price paid by lessee after deduction of all discounts received. In case of material found to be defective or returned to a vendor for any other reason, credit must be passed to the appropriate account when adjustment has been received by the lessee.

(2) Material transferred within the NPSL operations and material transferred from the NPSL operations or disposed of by the lessee must be priced at average warehouse stock prices. Transfers will be priced at current-condition value using average warehouse stock prices if they are available and reasonably representative of current market price. If they are not available or are not reasonably representative of current market price, the following applies. Material transferred must be priced at current-condition value replacement cost effective at date of transfer as specified in paragraph (3) of this section which must include material invoice cost, labor supplies, transportation, and material handling charges associated with getting material FOB to the NPSL property.

(3) Material required for operation must be purchased for direct charge to the NPSL account whenever practical. However, under circumstances where it is most practical for lessee to furnish materials from lessee's storehouse or other properties located in Canada, Alaska, or the continental United States, those material movements are subject to the following:

(A) New material is classified as Condition "A" and must be priced as follows:

(i) Tubular goods, except line pipe involving movements for less than 30,000 pounds, must be priced at the current price in effect on date of movement on a maximum carload or barge load weight basis, regardless of quantity transferred, equalized to the lowest published price FOB railway receiving point, recognized barge terminal, or air cargo receiving point nearest the NPSL where that material is normally available.

(ii) Line pipe involving movement of less than 30,000 pounds must be priced at the current price in effect at date of movement, as listed by a reliable supply store nearest the NPSL where such material is normally available. Movement of 30,000 pounds or more must be priced under provisions of tubular goods pricing in (i) of this subparagraph.

(iii) Other material must be priced at the current new price in effect at the date of movement, listed by a reliable supply store or FOB railway or air cargo receiving point nearest the NPSL where that material is normally available.

(iv) The NPSL account will not be credited with cash discounts applicable to prices provided for in paragraph (3) of this section.

(B) Used material is classified as either Condition "B" or "C" and must be priced as follows:

(i) Material in sound and serviceable condition and suitable for reuse without reconditioning moved to the NPSL, must be classified as Condition "B" and priced at 75 percent of the current price of new material.

(ii) Material in sound and serviceable condition and suitable for reuse without reconditioning moved from the NPSL must be classified as Condition "B" and priced at 75 percent of current new price if material was originally charged to NPSL account as new material, or at 65 percent of current new price if material was originally charged to the NPSL account as used material at 75 percent of current new price.

(iii) Material which is not in sound and serviceable condition and not suitable for its original function until after reconditioning must be either classified as Condition "B" and priced at 75 percent of the current price of new material when the cost of reconditioning is to be absorbed by the transferor or classified as Condition "C" and priced at 50 percent of current price of new material when the cost of reconditioning is to be charged to the transferee, provided Condition "C" value, plus cost of reconditioning, does not exceed Condition "B" value.

(iv) Obsolete material or material which cannot be classified as Condition "B" or Condition "C" must be priced at a value commensurate with its use or at prevailing prices. Material no longer suitable for its original purpose but usable for some other purpose must be priced on a basis comparable with that of items normally used for those other purposes.

(C) Loading and unloading costs may be charged to the appropriate NPSL account only at the rate of 25 cents per hundred weight on all tubular goods movements, in place of loading and unloading costs sustained when actual hauling costs of those tubular goods are equalized under 11 AAC 83.243(8) .

(D) Material involving erection costs must be charged at applicable percentage of the current knocked-down price of new material.

(E) The pricing and origination point of that material must be FOB a reliable supply store or railway, barge terminal, or air cargo receiving point nearest that lessee's storehouse from which the material is furnished.

(4) Whenever material is not readily obtainable at published or listed prices because of national emergencies, strikes or other unusual causes over which the lessee has no control, the lessee may charge the appropriate NPSL account for the required material at the lessee's actual cost incurred in providing that material, in making it suitable for use and moving it to the NPSL.

(5) In case of defective material, credit may not be passed to the appropriate NPSL account until adjustment has been received by the lessee from the manufacturers or their agents.

History: Eff. 11/9/79, Register 72; am 3/27/82, Register 81; am 8/15/82, Register 83

Authority: AS 38.05.020

AS 38.05.180