MidPoints: FERC Oil Pipeline Index & ENB Meeting with White House

研报英文原文证据摘录

MidPoints: FERC Oil Pipeline Index & ENB Meeting with White House

eater reliance on

intrastate systems and negotiated/contracted rates rather than common-carrier indexed tariffs. For

exposed names like OKE, management characterized the outcome as incrementally positive but immaterial,

with only ~30% of refined products revenues tied to FERC indexing. As such, while directionally supportive,

the ruling is unlikely to move earnings meaningfully. SUN/SUNC (Energy Transfer) also likely to experience

some benefit on the margins given legacy NuStar refined product pipeline assets.

Interestingly though... this goes against other data points we have seen on affordability. The

more constructive index outcome (PPI-FG minus 0.55%), and particularly the upward adjustment

driven by ROE normalization and broader cost inclusion, suggests FERC is willing to preserve a

degree of earnings power for pipelines, even as broader narratives across utilities, power, and energy

infrastructure have increasingly centered on end-user affordability pressures. This stands somewhat

in contrast to other regulatory signals where Commissions, Governors, and broad stakeholders have

skewed more defensively toward limiting rate increases or scrutinizing return assumptions. Here,

the decision to land above the NOPR (despite shipper advocacy for materially lower index levels)

implies that cost recovery and return stability remain a priority, even if it modestly shifts economics

toward operators. That dynamic cuts against the grain of tightening affordability constraints observed

elsewhere and reinforces the idea that, at least in liquids pipelines, regulatory frameworks may remain

relatively constructive.

While the broader direct implications to companies is de minimis positive, the bigger takeaway is this