First Petition

Staff Report & Agenda Item Details

I. First Petition A. Proposed “Restated” Rule 16.1 (Export Fees) Summary of “Restated” Rule 16.1 (proposal to repeal and replace current rule) Summary of Current MPGCD Rule 16.1 mandates the statutory maximum export fee of $0.20/1,000 gal. automatically increases fee by statutory maximum (3%/year) deletes hearing on fees and fee increases required by § 36.122(e-3) (perhaps presuming that a § 36.101 rulemaking hearing serves as the hearing on fees?) discretion to set export fee up to statutory maximum of $0.20/1,000 gal… …or a fee negotiated with the exporter (flexibility to negotiate higher fee or to accept unique consideration (e.g., Waha/Enstor)) discretion to increase fee by statutory maximum (3%/year) after a § 36.122(e-3) hearing, fee and fee increases set by Board resolution Note: Board should call a hearing to pass a resolution adopting an export fee (and probably allowing for negotiation of fee). Note: Although Cockrell did not raise it, current Rule 16.1(a) could and probably should be amended at some point to delete the 10% cap imposed by enabling act, as authorized by § 36.122(e-2) (N/A currently because we do not assess production fees; enabling act states that export fee cannot exceed 10% of production fees). Bottom line: Under existing rules, MPGCD can set $0.20/1,000 gal. export fee and a 3% increase effective in 2024 (20.6¢/1,000 gal.), while maintaining flexibility to negotiate upward/downward on fees or for consideration other than fee payment (e.g., Enstor/Waha), by adopting a resolution after a hearing on fees. 2 of 7 PREPARED BY LLOYD GOSSELINK, P.C.