advertisement

---

Last week, the Surface Transportation Board (STB) granted an estimated $63 million in reparations and rail rate reductions to the Arizona Electric Power Cooperative Inc. (AEPCO). The decision grants AEPCO an average rate reduction of 37 percent from 2009 through 2018.

The STB determined that BNSF Railway Co. and Union Pacific Railroad were overcharging the utility for shipments of coal transported from New Mexico, Wyoming and Montana to a power generating station near Cochise, Ariz., board members said in a prepared statement. The STB also found that AEPCO did not have a “feasible shipping alternative” to BNSF and UP, they said.

AEPCO pursued reparations and rate relief under the board's stand-alone-cost test. The results found that the maximum reasonable rates were below 180 percent of the variable costs of providing rail service, STB members said. However, the board can’t order railroads to set rates below the 180 percent threshold, so the board set the maximum rate that BNSF and UP can charge AEPCO at 180 percent, they said.

Meanwhile, the STB last week also opened a proceeding to consider the reasonableness of BNSF tariff provisions designed to reduce the amount of coal dust that blows off rail cars during coal train trips. Board members plan to examine whether the Class I's latest tariff — which gives shippers "safe harbor" if they apply one of three BNSF-approved coal-dust suppression methods using topper agents — is an “unreasonable practice.”

"A declaratory order proceeding will allow all views across the industry to be considered in one proceeding, and it will promote regulatory efficiency by addressing an area of uncertainty," board members said in a prepared statement.