NuStar Energy said the decision by the Federal Energy Regulatory Commission to revise its 2005 Policy Statement for Recovery of Income Tax costs is not expected to have a material impact on the earnings or cash flow of NuStar Energy.
“While we were disappointed by the FERC’s announcement that it no longer will allow interstate pipelines owned by master limited partnerships to recover an income tax allowance in the cost of service, it is important to note that the FERC’s decision is not expected to have a material impact on NuStar because the vast majority of our rates are contract-based or market-based,” said Brad Barron, president and CEO of NuStar Energy.
“We believe that FERC’s action is inconsistent with the intended tax treatment of master limited partnerships, essentially negating the intent of Congress,” Barron added. “We intend to work closely with our industry colleagues on legislative clarification of income-tax recovery. MLPs continue to serve as an important mechanism to build energy infrastructure.”