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10/21/2002



Rail News: Rail Industry Trends

BNSF, UP must maintain Arizona utility's PRB coal rates, STB says


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On Oct. 16, Surface Transportation Board announced that a U.S. appellate court upheld the board's order requiring Burlington Northern Santa Fe and Union Pacific Railroad to maintain Arizona Electric Power Cooperative Inc.'s (AEPCO) rate on some Powder River Basin (PRB) traffic.


AEPCO last year challenged the reasonableness of BNSF's and UP's joint rate to move coal from two New Mexico mines to AEPCO's Cochise, N.M., plant. The utility later amended its complaint to include shipments originating from some Colorado and PRB mines.


BNSF and UP then cancelled their PRB mine rates, claiming AEPCO wasn't shipping to that location, and sought STB approval to dismiss the rate complaint tied to PRB traffic.


Subsequently, AEPCO officials told STB they intended to ship coal from the PRB, and at the utility's request, the board directed the railroads to establish common carrier rates for AEPCO traffic moving from PRB mines. Eventually, one unit train moved coal to Cochise.


However, the utility later filed a complaint with STB claiming the railroads failed to fully meet their responsibility to maintain PRB rates because the rates didn't cover PRB mine origins in Montana and were scheduled to expire shortly.


STB ordered the roads to maintain the rates or replace them with ones covering the same service, and provide rates from Montana origins.
BNSF and UP complied, but sought judicial review of the order.


Contact Progressive Railroading editorial staff.

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