Our Experience

Industries Petroleum Natural Gas Chemicals Electronics Pharmaceuticals, Medical Devices, & Biotech Retail/Consumer Goods Technology Transportation Local/State Government School Districts Other Industries

Functional Areas Antitrust & Competition Analysis of Damages Forensic Economics Intangibles/IP Labor Economics Regulatory Economics & Finance Transfer Pricing Taxation Valuation Fiscal Impact Analysis Demographic Analysis Public Policy Analysis

 

Transportation Industries

IIC, Inc. has studied various aspects of the transportation industry including petroleum and natural gas pipelines, marine transportation, trucking and rail. We are familiar with the regulatory environment affecting each industry segment as well as market structure and competitive factors. We have valued assets in these industries as well as companies operating in these markets and we have provided expert testimony on various issues relating to these industries.

IIC, Inc. has reviewed and analyzed the rates filed by various pipeline companies in several matters before the Federal Energy Regulatory Commission (FERC) and state regulatory commissions. We have analyzed the cost of service computations of these companies, evaluated rates in comparison with competing carriers, and assessed the impact that rates have on shippers. We have evaluated the market and business environment of pipelines to ascertain the relative riskiness in which such pipelines operate and developed financial measures relating to the operating performance of such pipelines. We have employed the Commission’s discounted cash flow (DCF) methodology to develop estimates of the required return on equity, evaluated issues related to capital structure, operating expenses and the income tax allowance under FERC’s Order 154-B ratemaking principles. Further, IIC, Inc. has developed fully-allocated cost procedures for multi-origin/destination pipelines to permit rate analysis along individual origin/destination points.

IIC, Inc. provided expert testimony before the Maine Public Utilities Commission regarding the ability of a regulated marine transportation company to set predatory (below-cost) rates in an unregulated business through cross-subsidization. We analyzed the extent to which the regulated utility had market power in the unregulated industry and whether its decision to add additional capacity in the regulated industry would allow it to unfairly expand its business in the unregulated sector.

We prepared expert testimony before FERC and the California Public Utilities Commission on the filings of several newly-regulated common carrier pipeline companies in California. IIC, Inc. assessed the degree to which the pipeline com­panies may have been able to exer­cise market power in setting their rates and compared the carriers’ rates to the rates of existing alternative non-regulated carriers and other modes of transportation. We also analyzed the rates and critiqued the rate-making methods used by the various pipeline companies.

For an independent crude oil producer, IIC, Inc. evaluated the various options this producer had to move its crude oil from the field to an ocean terminal in order to be able to qualify for an export license. This included a detailed study of various pipeline options, rates and costs of each as well as alternative transportation options. We recommended various strategies and performed cost/benefit analyses of each.

We developed a large computer model that computed rates for various sized ocean going vessels, primarily engaged in the international shipment of crude oil and refined products. This model accessed data from a variety of sources and permitted the comparison of rate for different size vessels as well as contrast between spot and contract rates for long haul shipments.

IIC, Inc. offered expert testimony relating to the transfer of pipeline and related assets from one entity to another and whether sufficient financial protection existed for consumers and ratepayers given various potential claims against the pipeline. This work involved a detailed analysis of the contractual arrangements relating to the organization of the pipeline (a master limited partnership) and the transfer of assets to a holding company, as well as a valuation of the company, taking into consideration the potential liabilities faced by the company.