JAMES MacPHERSON Associated Press Writer (Editors note n Havre Daily News staff contributed to this story) BISMARCK, N.D.
Federal regulators have ruled in favor of BNSF Railway in a case brought by Basin Electric Power Cooperative over coal hauling rates. The Bismarck-based electric co-op claimed the railroad is a monopoly that charges too much to provide substandard service hauling coal to a Wyoming power plant. The Surface Transportation Board said Monday that Basin "failed to establish that the challenged rates are unreasonably high." "We are deeply discouraged and frustrated," said Mike Eggl, a Basin Electric senior vice president. Said BNSF spokesman Gus Melonas: "We're satisfied with the ruling and we believe it is fair and correct." Montana’s U.S. Rep. Denny Rehberg said in a press release that the ruling is symptomatic of the problem of limited railroad service. “Today’s ruling by the Surface Transportation Board is an unfortunate setback for the Basin E l e c t r i c Powe r Cooperative as well as Montana’s farmers and energy producers.,” Rehberg said in the release Monday. “For years, these producers have faced high shipping costs due to a lack of rail competition. STB’s d e c i s i o n f u r t h e r emphasizes the need for swift passage of my captive shipping legislation and the relief it will bring to Montana agriculture and energy producers.” Rehberg is one of 50 sponsors and cosponsors of a bill intended to help shippers in areas with limited rail service. The bill is intended to provide relief for agricultural producers shipping their goods from areas without competitive rail transportation. The “Railroad Compet i t ion and Service Improvement Act of 2007” enhances competition among rail carriers to ensure reasonable rail rates for Montana’s agricultural producers and electric cooperatives. “Montana producers, faced with narrow profit margins for Their products, are getting squeezed by high input costs,” said Rehberg, a member of the H o u s e A p p r o p r i a t i o n s Committee. “We’ve long needed a solution to the high costs associated with having only one rail shipper serving our state.” Basin has been at odds with BNSF over rail service since a 20-year contract to haul eight million tons of coal annually from the Powder River Basin to the Laramie River Station power plant expired in 2004. The two sides were unable to negotiate a contract, and BNSF then set a rate at twice the expired contract rate, or roughly $6 per ton, to haul the coal about 200 miles to the plant, board documents say. Basin, which filed the complaint against BNSF along with the Western Fuels Association, claims its costs for shipping coal to the Laramie River Station plant have doubled, and says that will cost utility customers in nine states an additional $1 billion over the next 20 years. The plant produces power for about two million consumers in North Dakota, South Dakota, Colorado, Iowa, Minnesota, Montana, Nebraska, New Mexico and Wyoming. Basin officials say the Laramie River Station is a "captive" customer to the railroad, the only one serving the plant. The increased costs to ship the coal will be passed on to Basin's customers, Basin spokesman Daryl Hill said. "One of the costs of doing business is reflected in the cost of the product you produce," Hill said. The board's ruling, released Monday, says it will give Basin a chance to revise its case in light of changes in the method of allocating revenue since the original complaint was filed. The Surface Transportation Board issued a similar ruling in another case, filed by AEP Texas North against BNSF, involving the rate to haul coal from Wyoming's Powder River Basin to a power plant. Eggl said Basin is mulling whether to appeal the board's decision. "We have to figure out if it's worth it at this point, or not," Eggl said. Basin has spent more than $5 million in legal fees in the case, Eggl said. It also produced more than 700,000 pages of evidence, including a document that requires the company to construct a fictitious railroad to prove the BNSF's costs are excessive, he said. The case, Eggl said, "is massive."
