Western Coal Traffic League offers qualified support for STB changes

The Western Coal Traffic League (WCTL), which represents various coal-fired power plant operators, filed June 20 comments at the U.S. Surface Transportation Board in general support of a board proposal to modify its Uniform Railroad Costing System (URCS).

The WCTL wrote: “The Board’s stated purpose in this proceeding is to modify its [URCS] to produce more accurate costs. WCTL agrees that the Board’s costing procedures should produce accurate costs. In order to achieve this objective, the Board must fully capture the efficiencies inherent in the unit train transportation of western coal.”

WCTL said it has long advocated that the best way to capture unit train cost efficiencies is to make movement-specific adjustments to URCS system-average costs. However, that is not the approach the board has chosen in this proceeding, so WCTL limited its comments to addressing the proposals the board has put forward.

“WCTL generally has no theoretical objections to most of the Board’s proposals,” the trade group said. “However, it is unclear to WCTL exactly how the proposals will be applied, and whether they will achieve their intended objectives because the Board’s notice does not provide a detailed step-by-step explanation on how the proposals will be implemented in URCS, nor has the Board conducted any new supporting cost studies based on actual traffic and operating data.”

For one thing, WCTL strongly objected to the board’s proposal to eliminate the use of the 2.0 empty-loaded (E/L) ratio when costing dedicated unit train moves. The board’s proposal to base the E/L ratios on system-average empty and loaded car miles by car type is fundamentally flawed because the reported car type data does not distinguish between the type of service the car is used to provide (i.e., single car, multiple car or unit train), WCTL added.

“Western coal moves in dedicated unit trains that cycle between origin and destination,” the trade group said. “Retention of the 2.0 E/L ratio – which is based on how western unit coal trains actually operate – is far more accurate than the Board’s proposed approach. WCTL also urges the Board not to eliminate appropriate switching-related efficiency adjustments when calculating the equipment costs for the use of railroad-owned equipment.”

WCTL is composed of coal shippers that pay for rail transportation of coal mined in the western U.S., mainly the highly-prolific Powder River Basin of Wyoming and Montana. Currently, WCTL members ship about 175 million tons of coal annually. WCTL actively participated in the board’s initial development of URCS, as well as in the board’s subsequent proceedings in which adjustments were made to URCS.

The board and its predecessor, the Interstate Commerce Commission, have long recognized that unit train service in general – and unit train service of western coal in particular – is far and away the most efficient and cost effective form of rail transportation, WCTL noted.

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.