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1/4/2002



Rail News: Rail Industry Trends

BNSF, UP strike out on motion to partially dismiss utility's rate complaint


Surface Transportation Board Jan. 3 denied Burlington Northern State Fe's and Union Pacific Railroad's motion to partially dismiss a rate complaint filed by Arizona Electric Power Cooperative Inc. (AEPCO).
The utility's complaint challenges the reasonableness of certain rates charged by BNSF and UP to transport coal both New Mexico mines and the Powder River Basin (PRB) to AEPCO's Cochise, Calif., power plant.
BNSF and UP requested that STB dismiss the portion of the complaint involving the PRB moves on the grounds that, under a stand-alone cost (SAC) test, revenues from PRB traffic might be used to fund rail facilities needed to transport New Mexico coal rather than strictly PRB coal.
STB determined that it wouldn't be appropriate to rule on a hypothetical stand-alone railroad — which AEPCO would develop under the SAC test to assess the reasonableness of the railroads' rates — until the utility introduces such a railroad as evidence.
However, board members agreed with BNSF's and UP's theory that revenues from specific traffic shouldn't help pay for rail facilities on other unrelated lines.
STB directed the parties to negotiate with that principle in mind and to suggest a procedural schedule for the complaint.


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