Arizona Electric seeks $9.2m from two railroads in coal dispute

Arizona Electric Power Cooperative on March 20 filed a statement of damages with the U.S. Surface Transportation Board for total damages (reparations plus interest) of over $9.2m against both the BNSF Railway and the Union Pacific Railroad.

In November 2011 decision, the board found that the joint through rates charged by defendants for transporting coal from mines in New Mexico and the northern portion of the Powder River Basin in Wyoming and Montana to AEPCO’s Apache plant near Cochise, Ariz., exceeded maximum reasonable levels. The board directed defendants to establish and maintain rates no higher than the jurisdictional threshold and to pay reparations to AEPCO, plus applicable interest, for shipments made under the challenged rates.

The BNSF and UP established proportional rates that took effect on Jan. 1. Those proportional rates are the subject of a petition that AEPCO filed with the board on Jan. 9, to which BNSF and UP replied separately on Jan. 30. Notwithstanding their disagreement as to whether BNSF and UP have properly complied with the board’s prescription, AEPCO and defendants have cooperated to identify the traffic entitled to reparations for the period from Jan. 2, 2009 (the date the first movement was tendered under the challenged rates), through Dec. 31, 2011, and to calculate reparations and interest in compliance with the decision.

AEPCO said in the March 20 filing that it believes that the decision is quite explicit in directing defendants to pay reparations, including interest, and that no further order or instruction from the board is needed, unless the parties disagree as to the computations, which is not the case here, said the cooperative.

BNSF, however, has stated that it requires a further order from the board before making payment, AEPCO added. Accordingly, AEPCO requested that the board enter an order directing defendants to make payment of reparations and interest as of Jan. 10, 2012, in the amount of $9,244,143.90.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.