Transportation Regulation

Shippers Challenge Railroad Coal Fee

By Steven Johnson | ECT Staff Writer Published: October 15th, 2012

Electric cooperatives and other coal shippers say freight railroads are trying to sidestep a regulatory ruling and make them pay tens of millions of dollars to control coal dust from rail cars.

Shippers contend that freight railroads are trying to circumvent a coal dust ruling. (Photo By: Newscom)

Shippers contend that freight railroads are trying to circumvent a coal dust ruling. (Photo By: Newscom)

In an Oct. 1 filing, NRECA and shippers groups asked regulators to reject a BNSF Railway Co. tariff that they say could cost them $50 million to $150 million in annual costs to fix a problem for which the railroad is accountable.

“It is unreasonable for shippers to pay these huge sums because the law places the payment responsibility on BNSF and payment of the charges results in shippers double-paying for the same services,” they told the Surface Transportation Board.

In a separate filing, Arkansas Electric Cooperative Corp., Little Rock, challenged the tariff, adding that BNSF is seeking unrealistic reductions in coal dust emissions.

The case is dubbed “Dust II” because it follows a March 2011 ruling in which the STB sided with AECC against BNSF’s original coal dust tariff. The board found that tariff was too vague and relied on undependable measurement technologies.

In the new case, shippers said the railroad ignored the STB’s suggestion that it negotiate with customers to find a solution to coal dust, which can damage tracks and beds as it accumulates.

Instead, the railroad unilaterally published the second “Dust II” tariff in July 2011 that requires shippers from coal mines in Wyoming and Montana to slash dust residue by 85 percent, mostly by treating coal with a chemical spray. Another carrier, Union Pacific, followed suit.

Shippers told the STB that railroad studies supporting the effectiveness of chemical treatments were predicated on faulty and arbitrary testing.

“The coal dust mitigation standards in the Revised Coal Dust Tariff are based on junk science, and publication of a tariff based on this junk science is an unreasonable practice,” according to the filing by lawyers for NRECA, the Western Coal Traffic League, the American Public Power Association and Edison Electric Institute.

AECC noted that BSNF’s own data show that operating and maintenance practices play a big part in producing coal dust.

“The way to prevent the deposition of fugitive coal is to address its causes, the railroad maintenance, infrastructure characteristics, and operating practices that shake the coal from the cars,” lawyers for the G&T wrote.

To sign up for the latest Regulatory Watch news alerts, click here.

Tags: , , ,