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6/27/2005



Rail News: Rail Industry Trends

NS settles two coal rate cases



On Friday, Norfolk Southern Corp. announced it reached settlements to resolve two rate cases pending before the Surface Transportation Board. The settlements with Duke Energy Corp. and Carolina Power & Light Co. (CP&L) are expected to increase the Class I’s second-quarter net income $24 million.

In 2002, Duke and CP&L filed separate complaints with the STB claiming NS’ coal rates were unreasonable. Duke Energy challenged rates to move coal from Virginia, West Virginia and Kentucky mines to the utility's electric-generating facilities in North Carolina; CP&L challenged rates to move coal from West Virginia, Kentucky and Virginia mines to power plants in Mayo and Hyco, N.C.

However, in an October 2004 decision, the board ruled the railroad’s rates were reasonable and encouraged the utilities to determine whether the Class I should phase in rate increases over time.


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