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11/7/2003



Rail News: Rail Industry Trends

NS charges Duke Energy 'reasonable' coal rates, STB says


On Nov. 6, the Surface Transportation Board determined that rates Norfolk Southern Railway charges Duke Energy Corp. are not unreasonable under the board's "stand-alone cost" test. Duke Energy challenged NS' rates to move coal from Virginia, West Virginia and Kentucky mines to the utility's electric-generating facilities in North Carolina.

However, because of NS' rate-increase amounts, STB ruled it would determine whether the Class I should phase-in rate increases over time if Duke Energy chose to further pursue the case.

"Norfolk Southern will comment further after it has had an opportunity to review the decision, including the invitation the board extended to Duke Energy," NS officials said in a prepared statement.

The board's stand-alone cost review methodology is designed to determine the lowest cost at which a hypothetical, efficient "stand-alone railroad" could provide the transportation service required by a complaining shipper.


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