TULSA, Okla., March 15, 2018 /PRNewswire/ -- Magellan Midstream
Partners, L.P. (NYSE: MMP) announced today that it does not expect
a material impact from today's revised policy statement by the
Federal Energy Regulatory Commission (FERC) to disallow income tax
allowance cost recovery in rates charged by pipeline companies
organized as master limited partnerships (MLPs).
Although Magellan is organized as an MLP, it does not have
cost-of-service rates that would be directly impacted by this
policy change. Rather, the rates on approximately 40% of the
shipments on Magellan's refined products pipeline system are
regulated by the FERC primarily through an index methodology. As an
alternative to cost-of-service or index-based rates, interstate
pipeline companies may establish rates by obtaining authority to
charge market-based rates in competitive markets or by negotiation
with unaffiliated shippers. Approximately 60% of Magellan's refined
products pipeline system's markets are either subject to
regulations by the related state or approved for market-based rates
by the FERC. In addition, most of the tariffs on Magellan's crude
oil pipelines are established by negotiated rates that generally
provide for annual adjustments in line with changes in the FERC
index, subject to certain modifications.
Page 700 of the FERC Form 6 filed by interstate pipeline
companies on an annual basis is a screening tool for analyzing
whether a pipeline may be over- or under-earning on a
cost-of-service basis. For the year 2016, which is the latest
information available, Magellan's Page 700 indicates that it is
under-earning on a cost-of-service basis even with the income tax
allowance line item removed.
Magellan Midstream Partners, L.P. (NYSE: MMP) is a publicly
traded partnership that primarily transports, stores and
distributes refined petroleum products and crude oil. The
partnership owns the longest refined petroleum products pipeline
system in the country, with access to nearly 50% of the nation's
refining capacity, and can store more than 100 million barrels of
petroleum products such as gasoline, diesel fuel and crude oil.
More information is available at www.magellanlp.com.
Portions of this document constitute forward-looking
statements as defined by federal law. Although management of
Magellan Midstream Partners, L.P. believes such statements are
based on reasonable assumptions, actual outcomes may be materially
different. Among the key risk factors that may have a direct impact
on the opportunity described in this news release are: (1) price
fluctuations and overall demand for refined petroleum products; (2)
changes in the partnership's tariff rates or other terms imposed by
state or federal regulatory agencies; (3) the occurrence of an
operational hazard or unforeseen interruption; (4) disruption in
the debt and equity markets that negatively impacts the
partnership's ability to finance its capital spending and (5)
willingness to incur or failure of customers or vendors to meet or
continue contractual obligations related to this potential
expansion. Additional information about issues that could
lead to material changes in performance is contained in the
partnership's filings with the Securities and Exchange Commission,
including the partnership's Annual Report on Form 10-K for the
fiscal year ended Dec. 31, 2017 and
subsequent reports on Forms 8-K. You are urged to carefully review
and consider the cautionary statements and other disclosures made
in those filings, especially under the heading "Risk Factors."
Forward-looking statements made by the partnership in this release
are based only on information currently known, and the partnership
undertakes no obligation to revise its forward-looking statements
to reflect events or circumstances learned of or occurring after
today's date.
Contact:
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Investors:
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Media:
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Paula
Farrell
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Bruce
Heine
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(918)
574-7650
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(918)
574-7010
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paula.farrell@magellanlp.com
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bruce.heine@magellanlp.com
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SOURCE Magellan Midstream Partners, L.P.