The opinion
ACCEPTED
03-15-00728-CV
12671279
THIRD COURT OF APPEALS
AUSTIN, TEXAS
9/13/2016 1:41:56 PM
JEFFREY D. KYLE
CLERK
No. 03-15-00728-CV
FILED IN
IN THE THIRD COURT OF APPEALS 3rd COURT OF APPEALS
AUSTIN, TEXAS
AUSTIN, TEXAS
9/13/2016 1:41:56 PM
JEFFREY D. KYLE
Clerk
WESTLAKE ETHYLENE PIPELINE CORPORATION,
Appellant,
v.
RAILROAD COMMISSION OF TEXAS AND
EASTMAN CHEMICAL COMPANY,
Appellees.
On Appeal from the 98th Judicial District Court
Travis County, Texas, Cause No. D-l-GN-15-001009
EASTMAN CHEMICAL COMPANY'S ORAL ARGUMENT EXHIBITS
James E. Mann Wallace B. Jefferson
State Bar No.12926100 State Bar No. 00000019
jmann@dwmrlaw.com wjefferson@adjtlaw.com
Mamie McCormick Dana Livingston
Leslie Padilla J. Woodfin Jones
DUGGINS WREN MANN & ALEXANDER DUBOSE JEFFERSON &
ROMERO, LLP TOWNSEND LLP
600 Congress, Suite 1900 515 Congress Avenue, Suite 2350
Austin, Texas 78701 Austin, Texas 78701-3562
Telephone: (512) 744-9300 Telephone: (512) 482-9300
Facsimile: (512) 744-9399 Facsimile: (512) 482-9303
EXHIBIT A
APPLICATION FOR PERMIT TO OPERATE A PIPELINE IN TEXAS FORMT-4
(See 16 TAC 3.70) (8106)
Railroad Commission ofTcxa.s
Gas Services Division
License & PennilS Seclion Pcnni1No. 05253
I. Operator (Applicant)(See Instruction I) Address
Mustang Pipeline Company PO Box 7444 LonQvlew, Texas 75607
PS# 597145
2. Does the above named operator own pipeline? Oves [!]No lf'No', give name and address of owner.
Westlake Eth lene Pipeline Corporation, 2801 Post Oak Blvd., Houston, Tx 77056
J, Does lhe above named operator conduct or control !he cconomil: operations on the pipeline?
lf'No', give name, address and P· '# of oconomic operator. (See lnsll\IC!ion 2)
I. Mark appropri11e block for wh of the following ques1ions:
a) Arc lhe pipelines covered wider this pcnmit [J1n1en11to [!Jlntrastotc
b) Fluid ~~d :
LJCrudc [!]condcnsaic Cloas (•) Droc1ucu (") 0Full Oas Well Stream 0Full Oil Well Stream Oolher(")
•Specify _ _ _ _ _ _ _ _ _ __
c) Docs fluid conlDin H1S? Dves [!]No If yes, Ill whal concentration? _ _ _ _ _ ppm
d) Pipeline class1fic111ion:
If answer lo (b) is olher than natural gM, will the pipeline be operated as c::::Jacommon canieror asO privale line?
\Ch. 111, Texas Netural Resources Code)
If answer to (b) is natural gu, will the pipeline be operated as a .Qsasutility or as a Wrivale line?
(Tew Utilities Code)
NOTE.: A lllltW'tl/ gas piptlinr fHm1il will no/ sp1cify whtthrr lh• pipt/in• is a gas utiliry or a pri1·a11 /in" The Oas Srrviru Divu1on
Gas Utrliry Audit Section will ma/<4 thal dmrminalion arrd no1f/y rh1 optraror of its sta/IU.
e) pipeline use any public highway or road, railroad, public utility, or other common ca.mer right-of·way? Elves
f) Will the pipeline c;ury only 1he gas and/or li11u1ds produced by pipeline owner or 1>pm1or? Ovu
IL!!lswcr to (f) is "No'. is the gas andloJ;.!.is.utds:
LJPuroh .. od from olhera. L!.JOwntd by olh111, bul lransponed for • roe. c:lBolh purchased and tmnsported for olhc ...
2. a.) New insull1t1on? 0Ycs [!JNo NcwConstructionReportNumber _ _ _ _ _ _ _ _ __
b) Rel\Cwal for 581T1• openuor'? [!Ives 0No (seo 16 TAC 8.llS re. applicability)
c) Extcnsionormodlfic1111on? [!Jvcs D o
lflhere has been a change in operator or ownmhip, give name and address of previous opcnitor, owner, or lessor (Anach ronn T4B)
Previous owner; Mustang Pipeline Company, PO Box 7444 Longview, Tx .• 75607 (Form T4B forthcoming by new Owner)
3 Check deLailed pwposc{s) for which describe§ipeline Wiii be 145ed:
§Transmission
01theling
01s lnje1:tion
Terminal (Slorage Field)
4. US.G.S. 7.S MinUle Quad aaachcd? (Scale 1• ~ 2,000 feet)
Gu Lift
Gas Plant
§ lndll.1tlial Distribuiion RECEIVED
Manufacturing Feed Steck (Own Conswfi!ScC. OF TEXAS
Other (••plain) Transport lPGs and Initial uaa Is B1hyfene
Overview msp (24" x 24" 11 " = 20 miles or less) aiwhtd and digilal dala sent?
I declare, under penalties prescribed in Sec:. 91 .143, Texa.s Natwal Rcsoun:es Code, that I am authorized to make this report, that'1irl~ ~ prepared
by me or under my supervision and dircl:lion, and that data and facts stated therein arc tnac, com:ct, and complete, 10 the best of my knowledge.
Mr. James Ray
(Type or Prinl Name of Person)
President, Mustang Pipeline Company
(Tille)
lnqu111cs regardins lh1s apphcat1on should be d110.:~ to:
N•mc: Curtis G. Brown Adder .. · PO Box 74441 Longview, Tx. 75607 Phone (A/C) (903) 237•6606
Fax ( (903) 2~7·5743 E-mail cgbrown@eastman.com
The RaiboaO Canmissial does not dbcnn'llllll8 on Illa bmis of race, COier, national Ollgin, au, religion, age, or <fGallilty In empa,ment or tie piolisian of services. TOD/TOY (512) 463-72&4
EXHIBIT B
2002 MUSTANG TARIFF 2013 WESTLAKE TARIFF
Ori in/Deliver Point: Carrier's station Origin Points: Carrier's stations located at or
located at or adjacent to the te1minals of adjacent to the terminals of Equistar
Equistar Chemicals at ont Belvieu, Texas, Chemicals, Williams Storage, and Flint Hills
when such point of delivery/origin is Resources at Mont Belvieu, Texas, when such
practicable and consistent with the operation points of origin are practicable and consistent
of the pipeline. CR332. with the operation of the pipeline, or such
other points as the Carrier may designate and
publish from time to time. CR342.
Origin/Delivery Point: Carrier's station in eliveI)'J Point: Carrier's station in Gregg
Gregg County [G ngviewi], Texas, located County [Longview], Texas, located adjacent to
adjacent to the Texas Operations Eastman the Texas Operations Eastman Chemical
Chemical Company/facility (in Gregg and Company facility (in Gregg and Harrison
Harrison Counties, Texas), when such point Counties, Texas), when such point of delivery
of delive1y/origin is practicable and is practicable and consistent with the operation
consistent with the operation of the pipeline. of the pipeline, or such other points as the
CR332. Carrier may designate and publish from time
to time. CR342.
2002 MUSTANG TARIFF 2013 WESTLAKE TARIFF
17. Direction of Flow 17. Direction of Flow
In the event the pipeline is configured and In the event the pipeline is configured and
equipped so that it is physically capable of equipped so that it is physically capable of bi-
bi-directional flow, Carrier at its sole directional flow, CaiTier at its sole discretion
discretion will choose the direction of flow lWill choose the direction of flow between the
between Point of Origin and Point of and the Destination Point.
Delivery. Carrier will make a reasonable
--
attempt to accommodate Shippers throughl
the exchange of roduct at Origin and
elivery Points. Any exchanges will be
subject to the same te1ms and conditions
applicable to shipments pursuant to this
tariff, including the rate charged for such
shipments. The provisions of this tariff
apply to all shipments or exchanges
regardless of the direction of flow or
whether the product shipped or received is
physically moved from one point to another.
CR338.
EXHIBIT C
EXCERPT FROM EXHIBIT A TO
RAILROAD COMMISSION'S FINAL ORDER
Westlake Ethylene Pipeline Corporation-T.R.R.C . No. _ _ __
[Cancels Mustang Pipeline Company - Texas Local Tariff. -3)
WESTLAKE ETI!YLENE PIPELINE CORPORATION
Mont Belvieu to Longview Pipeline
LOCAL TARIFF
Applying on
PETROLEUM PRODUCTS
As Defined in This Tariff
TRANSPORTED QR EXCl:!&."KJEQ BY PIPELINE
Between Points Within the State of Texas
Subject to the Regulations
Set Forth Herein
****
Origin/DeliYe.rx Point: Carrier's stations located at or adjacent to the. terminals of Equistar
Chemicals, Williams Storage, and Flint Hills Resources at Mont Belvieu, Texas, when such
points of origin are practicable and consistent with the operation of the pipeline, or such other
points as the Carrier may designate and publish from time to time.
Qti&inLDelivery Point: Carrier's station in Gregg County, Texas, located adjacent to the Texas
Operations Eastman Chemical Company facility (in Gregg and Harrison Counties, Texas), when
such .point of delivery is practicable and consistent with the operation of the pipeline, or such
other points as the Carrier may designate and publish from time to time.
****
17. Direction of Flow
In the event the pipeline is configured and equipped so that it is physically capable of bi-
directional flow, Carrier at its sole discretion will choose the direction of flow between
the Origin Point and Delivery Point. Carrier will make a reasonable attempt to
accommodate Shippers through the exchange of product at Origin and Delivery Points.
Any exchanges will be subject to the same terms and conditions applicable to shipments
pursuant to this tariff, including the rate charged for such exchanges. The provisions of
this tariff apply to all shipments or exchanges regardless of the direction of flow or
whether the product shipped or received is physically moved from one point to another.
CR71, 73, 80.
EXHIBIT D
BEFORE THE
RAILROAD COMMISSION OF TEXAS
COMPLAINT FILED BY EASTMAN §
CHEMICAL COMPANY AGAINST §
WESTLAKE ETHYLENE CORP., § GAS UTILITIES DOCKET NO. 10296
(WESTLAKE PIPELINE) REGARDING §
WESTLAKE PIPELINE'S SYSTEM T~4 §
PERMIT NO. 05253- §
FINAL ORDER
Notice of Open Meeting to consider this Order was duly posted with the Secretary of
State within the time period provided by law pursuant to TEX. Gov'r CODE ANN. Chapter 551, et
seq. (Vernon 2008 & Supp. 2014). The Railroad Commission of Texas adopts the following
findings of fact and conclusions of law and orders as follows:
FINDINGS OF FACT
I. Westlake Ethylene Pipeline Corporation (Westlake Pipeline) operates a pipeline pursuant
to T-4 Permit No. 05253.
2. The pipeline that is subject to T-4 Permit No. 05253 runs from Mont Belvieu, Texas to
Longview, Texas and traverses seven counties: Chambers, Liberty, Polk, Angelina,
Nacogdoches, Rusk and Gregg, Counties.
3. The pipeline is currently operated by Buckeye Development & Logistics I LLC
(Buckeye) on behalf of Westlake Pipeline.
4. On July 29, 2013, Eastman Chemical Company (Eastman) filed a complaint against
Westlake Ethylene Pipeline Corporation (Westlake Pipeline) alleging that a tariff
published and filed by Westlake Pipeline in 2013 (2013 Westlake Pipeline Tarif!J was
discriminatory.
5. A notice of hearing on jurisdictional issues was issued on September 13, 2013, and a
hearing on jurisdictional issues was held on September 27, 2013.
6. A notice of hearing on the merits was issued on March 24, 2014. The notice of hearing
bifurcated the hearing in this matter into two phases. Phase 1 addressed all
discrimination and non-rate issues. All rate issues have been severed into Phase II.
7. Phase II was severed into a separate proceedings docketed as GUD No. 10358, Rate-
Setting Proceeding Regarding Westlake Pipeline Severed from GUD No. 10296.
GUD Docket No. I 0296 Final Order Page 2of9
8. On May 2, 2014, Westlake Pipeline filed an affidavit attesting that notice was served on
the entity that operates the pipeline on behalf of Buckeye and all current customers of the
pipeline that is the subject of this proceeding.
9. The hearing on Phase I, GUD No. 10296, was held on May 6, 2014.
10. Westlake Pipeline b ~ub~iuiury uf Westlake Chemical Corporntion (Wcstluke Chemical).
Another Westlake Chemical subsidiary, West.lake Longview Corporation (Westlake
Longview) is located in Longview.
11. The facilities of Westlake Longview are connected to ethylene supplies at Mt. Belvieu
through Eastman's ethylene distribution system at Longview and the Westlake Ethylene
Pipeline.
12. Westlake Longview consumes large quantities of ethylene in Longview.
I J. Westlake Longview, or its ethylene supplier, is a shipper on the pipeline operated bY.
Westlake Pipeline.
14. Eastman owns and operates ethylene producing facilities in Longview.
15 . Eastman's Longview facility converts natural gas liquids (NGLs) feedstock, such as
ethane and propane, to ethylene and propylene.
16. Eastman currently produces about 1,400 million pounds of ethylene annually from its
crackers at Longview .
17. Eastman uses about 600 million pounds of ethylene annually at Longview, leaving about
800 million pounds of ethylene that must either be sold in Longview or transported to, or
exchanged at, Mont Belvieu each year.
18. Other than Eastman ' s own use, the only substantial market for ethylene in Longview is
Westlake Longview .
19. Eastman is a shipper on the pipdine operated by Westlake Pipeline.
20. In 1995, Eastman began planning a "common carrier" pipeline to provide ethylene to its
Longview plant and constrnction began in December 1996.
21. Mustang Pipeline Company (Mustang), an Eastman subsidiary, started construction on
the pipeline.
22. In 2002, Eastman constructed the "Williams Connection."
23. The Williams Connection connected Eastman's Mont Belvieu terminal to contracted
storage owned by the Williams Company, the first fungible ethylene storage facility in
GUD Docket No. I 0296 Final Order Page 3of9
Mont Belvieu, and added the compression necessary to ship ethylene south to Mont
Belvieu.
24. At the time of the construction of the Williams Connection, Eastman sought the ability to
sell surplus ethylene produced in Longvi·ew and allow Eastman to maintain ethylene
production when ethylene-consuming fadlities were down in Longview.
25. In 1997, Mustang Pipeline issued the original tariff for the pipeline (1997 Mustang
Tariff) .
26. The 1997 Mustang Tariff identified the "origin point" as Mont Belvieu and the "delivery
point" as Longview.
27 . The 1997 Mustang Tariff did not include provisions for the exchange of ethylene.
28 . In 2002, after adding compression necessary to deliver ethylene from Longview to Mont
Belvieu, Mustang 'Pipeline issued a revised tariff (2002 Mustang Tariff).
29. The 2002 Mustang Tariff identified Mont Belvieu as both an ori gin and delivery point.
30. The 2002 Mustang Tariff identified Congview as both an origin and delivery point.
31 . The 2002 lvfustang Tariff also indicated that Mustang, the operator of the pipeline, would
in addition to physical deliveries of ethylene, offer exchange services
32. On November 10, 2006, Eastman and Westlake Chemical entered into an acquisition
agreement.
33. As part of the sales agreement the Mustang pipeline assets were transferred to Westlake
Pipeline.
34. As part of the acquisition agreement certain ethylene-consuming facilities owned by
Eastman were sold to Westlake Longview.
35 . The purchase agreement between Mustang Pipeline and Westlake Pipeline included the
sale of the pipeline conduit.
36. Westlake Pipeline's ownership of the pipeline at the southern end begins just outside the
two meters belonging to Equistar and Williams and a check meter and pipeline belonging
to Eastman. The pipeline extends from that ownership point at Mont Belvieu to a point
that connects the Eastman plant to distribution facilities in Longview. The pipelines'
connection at Longview is on property that is owned by Eastman.
37 . The pipeline purchase agreement also included all right of ways, easements, privileges
and grants upon and under which the pipeline system was laid and installed.
GUD Docket No. 10296 Final Order Page 4of9
38. Westlake Pipeline did not acquire any tenninals in the sale, the pipeline terminals, nor
any of the compression necessary to operate the pipeline.
39. The overall sales agreement between Eastman and Westlake Chemical included the
acquisition, by Westlake Longview, of three polyethylene units that are located within the
Eastman's plant in Longview.
40. As part of the overall sale, on November I 0, 2006, Eastman Chemical and Westlake
Chemical Corporation entered into the Ethylene Sales and Exchanges Contract (ESA).
41. The ESA is a ninety-nine year ethylene contract that sets a market price using a pre-
determined formula agreed to by both parties in the contract.
42. Pursuant to the ESA, Eastman Chemical secured a guaranteed market for ethylene, and
Westlake Longview Corporation secured an ethylene supplier. ·
43. The ESA also provided Eastman with the ability to exchange any excess ethylene that
Westlake Longview did not purchase from Eastman.
In 2013, Westlak.e Pipe me puolished and filed a new tariff for the Ripeline (2013
Westlake Tari./)) .
45 . Pursuant to the 2013 Westlake Pipeline Tarijj; Mont Belvieu was no longer designated as
both an origin and delivery point. Mont Belvieu was designated as an origin point.
Pursuant to the 2013 Westlake Pipeline Tariff, Longview was no longer designated as
both an origin and delivery point. Longview was designated as a delivery point.
47. The 2013 Westlake Pipeline Tariff removed all references to ethylene exchange as
Westlake Pipeline determined that exchange services would no longer be offered.
Mont Belvieu is the largest market for etnylene proaucers in the United States.
49. Pipeline transport is among the most important factors that determine regional prices,
supply, and demand.
50. It is reasonable to conclude that the ethylene producers in Longview would require access
to the ethylene market in Mont Belvieu.
51. It is reasonable to conclude that ethylene consumers that engage in transactions in Mont
Belvieu would desire access to ethylene produced in Longview
52. Eastman produces large quantities of ethylene in Longview and has a physical necessity
to move ethylene to Mont Belvieu.
GUO Docket No. l 0296 Final Order Page 5of9
'··
53. Ethylene was transported from Longview to Mont Belvieu on several occasions in the
following years : 2005, 2006, 2007, 2008, and 2013.
54. The necessity for southbound flow predates the purchase of the system by Westlake
Pipeline. It is the reason that compression was added in 2002 to allow backhaul and to
permit Eastman to sell surplus ethylene that it produced in Longview to customers on the
Gulf Coast.
55 . Eastman has demonstrated a demand for exchanges as Eastman has engaged in exchanges
with Westlake Pipeline's affiliate, Westlake Longview since entering into the ESA.
56. Backhaul service is physically possible on the pipeline operated by Westlake Pipeline.
57. · The pipeline system was configured in 2002 to accept bidirectional flow .
.58 . Backhaul on the pipeline occurred in 2005 , 2006, 2007, 2008, and 2013 .
59. The 2013 Westlake Pipeline Tariff removed the \backhaul service previously offered in
the 2002 Mustang Tariff.
60. The record in this case does not provide evidence of the impediment to the continued
provisions of backhaul service.
61. Any concern that this operator Jacks the compression necessary to provide backhaul
service is addressed by the language in the preexisting 2002 Mustang Tariff, which
requires shippers to deliver and receive product at the necessary pressures .
62 . Additional language may be added to further protect the common carrier;
The paragraph means that a shipper is responsible for providing or aITanging
sufficient compression or services to effectuate the entry of the product into the
pipeline at an Origin Point and delivery of the product out of the Pipeline at a
Delivery Point.
63. There is no impediment for a pipeline to provide exchange service and the risks
associated with that service may be miti gated by appropriate language in the tariff.
64. The 2002 Mustang Tariff contained language that protected the pipeline operator and is
included in the 2013 Westlake Pipeline Tariff. Additional language may be added to
protect the operator as follows:
Carrier is not obligated to transport or exchange any volumes of ethylene unless
Shipper delivers those volumes to the common stream out of which deliveries are
made to Pipeline Customers.
GUD Docket No. 10296 Final Order Page 6of9
65. Due to the unique circumstances of the ethylene market in Longview, without an
exchange provision in the applicable pipeline tariff the only alternative for Eastman is to
engage in exchanges with Westlake Longview, the pipeline operator's affiliate.
66. If exchange service is included in the applicable pipeline tariff Eastman may engage in
exchanges with market participates in Mont Belvieu and will no longer be a captive to
Westlake Longview.
67. Eastman, Westlake Longview, and Westlake Longview's ethylene suppliers (other than
Eastman), are potential shippers on the pipeline operated by Westlake Pipeline.
68. Eastman and Westlake Longview are located in Longview.
69. Eastman and Westlake Longview each require movement of ethylene between Mont
Belvieu and Longview.
70. Eastman and Westlake Longview require access to the ethylene market in Mont Belvieu
and the ethylene market in Longview.
71. -The only difference is that Eastman requires deliveries from Longview to Mont Belvieu
and Westlake Longview requires deliveries from Mont Belvieu to Longview.
n. Eastman and Westlake Longview, or its other potential suppliers of ethylene, are
similarly-situated shippers
73. The tariff changes in the 2013 Westlake Pipeline Tariff related to backhaul eliminated a
service that was previously provided to Eastman on this pipeline.
74. The tariff changes in the 2013 Westlake Pipeline Tariff related to backhaul physically
shut Eastman out of the pipeline.
75. Longview is no longer designated as an "Origin Point" and Mont Belvieu is no longer
designated as a "Delivery Point."
76. Due to the operation of the filed tariff Eastman would no longer be able to demand
backhaul service
77. Due to the operation of the filed tariff, Westlake Pipeline would be unable to treat those
points as Origin and Delivery points.
78. Westlake Longview will continue to have access to the pipeline and the Mont Belvieu
ethylene market.
79. Eastman would be shut out of the Mont Belvieu market by the changes in tlie 2013
Westlake Pipeline Tariff
GUD Docket No . 10296 Final Order Page 7of9
80. Westlake Pipeline has offered no reasonable basis for the disparate treatment as regards
to physical deliveries on the pipeline.
81 . The tariff change in the 2013 Westlake Pipeline Tariff related to exchanges ellminates a
pre-existing service offered by the pipeline operator.
82. Once that service is eliminated, Eastman must engage in exchanges with We~tlflke
Longview, an affiliate of the pipeline operator.
83. The removal of exchange service further limits Eastman's access to the Mont Belvieu
market through the pipeline.
84. The elimination of backhaul and exchanges, pre-existing service offered by the common
carriers of this pipeline, provides an unreasonable preference in favor of Westlake
Longview.
85. Whether discrimination by a common carrier exists depends on the facts of a particular
case. The discriminatory act found to have occurred in this docket is the cancellation of
pre-existing backhaul and exchange services so that one shipper, Eastman Chemical, is
forced to sell or exchange the ethylene it produces to the only other shipper on the
pipeline, Westlake Longview, the parent company of the pipeline.
CONCLUSIONS OF LAW
I. Westl ake Pipeline is a "common carrier" as that term is defined under TEX. NAT. RES.
CODE ANN. § l I l.020(d) (Vernon 2001 & Supp. 2014) and is therefore subject to the
jurisdiction of the Railroad Commission of Texas (Commission).
2. As a common carrier Westlake Pipeline is subject to all provisions of the Common
Carrier Act, TEX. NAT. RES. CODE ANN . §§ 111 .002, 111.003, 111 .011 - 111.025,
111.131 , 111.133 - 111.142, 111.181 - 111.190, 111.221 - 111.227, & 111.261 -
111.262.
3. In addition to the powers provided by other sections of Chapter 2, Subchapter B of the
Business Organization Act, TEX . BUSINESS CORP. ACT ANN . § 2.105 provides that a
corporation, such as Westlake Pipeline engaged as a common carrier in the pipeline
business for the purpose of transporting oil products has all of the rights and powers
conferred on a common carrier by Sections l I 1.019 - 111.022.
4. The Commission has jurisdiction over Westlake Pipeline, associated affiliates, and the
matters at issue in this proceeding pursuant to TEX. NAT. RES. CODE ANN. §§ 81 .051 and
§§ 111.002, 111.003, 111.011 - 111.025, 111.131, 111.133 - 111 .142, 111.181 -
111.190, 111.221 - 111.227, & 111.261-111.262.
5. As required by TEX. NAT. RES. CODE ANN. § 111 .014 Westlake Pipeline shall make and
publish their tariffs.
GUO Docket No. 10296 Final Order Page8of9
6. A common carrier's obligations to its customers cannot exceed its duties under a
published tariff and published tariffs govern the relationship of the common carrier with
its customers. Common carriers may not vary a tariff's terms with individual customers,
discriminate in providing services, or charge rates other than those included in properly
published tariffs. The published tariffs and the constraints related to those tariffs provide
predictability and certainty for all potential shippers and t:nabk :;hippers to make
decisions based upon the rates and services reflected in the published tariff. CenterPoint
Energy Entex v. R.R. Commn'n of Tex, 208 S.W. 3rd 608 (Tex. - Austin 2006, pet.
dism'd) ·
Westlake Pipeline, as a common carrier, is required to receive and transport ethylene
delivered to it for transportation and perform its other related duties without
di scrimination as required by T EX NAT. RES. CODE A NN. § 111.015.
8. Westlake Pipeline, as a common carrier, shall not discriminate between or against
shippers with regard to facilities furnished, services rendered, or rates charged under the
same or similar circumstance in the transportation of ethylene as required by TEX. NAT..
RES. CODEANN. § 111.015 .
9. Westlake Pipeline, as a common carrier, may not charge, demand, collect, or receive
either directly or indirectly from anyone a greater or lesser compensation for a service
rendered than from another for a like and contemporaneous service.
l 0. Westlake Pipeline' s 2013 tariff terminated pre-existing backhaul and exchange services
and. provided an unreasonable preference and advantage to its affiliate, Westlake
Longview.
11. The Commission has the authority to require that tariffs published by a common carrier
and tiled with the Commission are not discriminatory.
12. Tariffs that provide disparate treatment to similarly-situated shippers or provide an
unreasonable preference or advantage to an affiliate at the expense of other shippers are
discriminatory.
13 . There is no general duty for a common carrier to provide backhaul and exchange
services . Neither is there a general duty to maintain services previously offered by a
common carrier. It is discriminatory, however, for a common carrier to cancel previously
existing services and cut off access to a market so that all other shippers on the pipeline
are forced to sell or exchange their product with a shipper on that same pipeline which is
affiliated with the pipeline.
IT IS THEREFORE ORDERED that the 2013 Westlake Pipeline Tariff is rejected and may not
be enforced by Westlake Pipeline.
GlJD Docket No. l 0296 Final Order Page 9of9
IT IS FURTHER ORDERED that Westlake Pipeline publish and file with the Commission a
revised tariff that is not discriminatory and confonns to the tariff attached to this Final Order as
Exhibit A.
IT IS FURTHER ORDERED that, in accordance with TEX. NAT. RESOURCE CODE ANN.
§ 111.015, within 30 days of the date this Order is signed, Westlake Pipeline shall file the
approved tariff with the Director of the Oil and Gas Division. The tariffs shall reflect the
findings of fact and conclusions of law herein.
IT IS FURTHER ORDERED that all proposed findings of fact and conclusions of law not
specifically adopted in this Order are hereby DENIED. ·
IT IS ALSO ORDERED that all pending motions and requests for relief not previously granted
or granted herein are hereby DENIED.
This Order will not be final and effective until 20 days after a party is notified of the
Commission's order. A party is presumed to have been notified of the Commission's order three
days after the date on which the notice is actually mailed. If a timely motion for rehearing is
filed by any party at interest, this order shall not become final and effective until such motion is
overruled, or if such motion is granted, this order shall be subject to further action by the
Commission. Pursuant to TEX. Gov'T CODE ANN. § 2001.146(e), the time allotted for
Commission action on a motion for rehearing in this case prior to its being overruled by
operation of law, is hereby extended until 90 days from the date the order is served on the
parties.
.i-h.
SIGNED thisL day of December 2014.
RAILROAD COMMISSION OF TEXAS
CHAIRMAN CHRISTI CRADDICK
ER
COMMISSIONER BARRY T. SMITHERMAN
CERTIFICATE OF SERVICE
On September 13, 2016, I electronically filed the oral argument exhibits with
the Clerk of the Court using the eFile.TXCourts.gov electronic filing system which
will send notification of such filing to the following.
Lindsay Hagans Prerak Shah
State Bar No. 24087651 State Bar No. 24075053
lindsay.hagans@bracewelllaw.com prerak.shah@texasattorneygeneral.gov
BRACEWELL LLP Lisa Bennett
711 Louisiana Street, Suite 2300 State Bar No. 24073910
Houston, Texas 77002 lisa.bennett@texasattorneygeneral.gov
Telephone: (713) 223-2300 OFFICE OF THE ATTORNEY GENERAL
Facsimile: (800) 404 3970 P.O. Box 12548
Austin, Texas 78711-2548
Telephone (512) 936-2923
Facsimile: (512) 474-2697
Counsel for Appellee
Texas Railroad Commission
Dale Wainwright
State Bar No. 00000049
dale.wainwright@bracewelllaw.com
BRACEWELL LLP
111 Congress Avenue, Suite 2300
Austin, Texas 78701
Telephone: (512) 472-7800
Facsimile: (800) 404-3970
Counsel for Appellant
Westlake Ethylene Pipeline Corp.
/s/ Dana Livingston
Dana Livingston