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Rail News: Federal Legislation & Regulation

STB to hold hearing on cost determination effects of Berkshire's BNSF purchase

The Surface Transportation Board (STB) plans to hold a public hearing on March 22 in Washington, D.C., to explore the impact of Berkshire Hathaway Inc.’s BNSF Railway Co. acquisition on certain cost determinations made by the board. Berkshire acquired the Class I in 2010 for $43 billion.

The STB will analyze the effect of the selling price on its annual Uniform Rail Costing System (URCS) and revenue-adequacy findings for BNSF. The URCS is a general purpose rail costing system used annually by the board to estimate Class Is’ variable and total unit costs.

The Western Coal Traffic League (WCTL) and other parties had argued that BNSF's acquisition price produced an $8.1 billion write-up in the railroad's net investment base for URCS costing purposes and decreased the Class I’s 2010 annual depreciation calculations by $128 million.

“WCTL suggests that the board should, beginning with its 2010 findings, adjust BNSF's URCS costs by removing the $8.1 billion write-up and correspondingly adjusting the railroad's annual depreciation,” STB officials said in a meeting notice.

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More News from 2/17/2012