STB accepts latest arguments in Tongue River Railroad case

The U.S. Surface Transportation Board, in a decision served Aug. 27, allowed extra evidence from various parties into a case for the coal-hauling Tongue River Railroad (TRRC) and set a further procedural schedule in this case.

The Northern Plains Resource Council and Wally McCrae/Clint McCrae d/b/a the Rocker Six Cattle Co. (collectively called the NPRC Parties) and the Tongue River Railroad have submitted a number of filings and related motions not contemplated by the procedural schedule established for this proceeding.

“This decision accepts the various filings into the record, permits limited discovery, establishes due dates for any resulting filings, and imposes a protective order to safeguard confidential information,” said the Aug. 27 board decision.

TRRC is seeking a board license to construct and operate a rail line in southeast Montana. The line woud transport low sulfur subbituminous coal from a planned coal mine currently in the permitting process by Arch Coal (NYSE: ACI) at Otter Creek, Mont., and any future mines that might be developed in the Otter Creek and Ashland, Mont., area.

TRRC in December 2012 changed its preferred alignment for the new line to the 42-mile Colstrip Alignment, running between Colstrip, Mont., and Ashland/Otter Creek, which would connect to the north with an existing BNSF Railway line known as the Colstrip Subdivision.

The application has gone through various rounds of comment, including opposition comments from the NPRC Parties. The NPRC Parties filed a petition asking the board to revise the procedural schedule to allow for a six-month discovery period. Generally, they explain that the new expert evidence that TRRC would be submitting in reply to the comments on the transportation merits creates contested issues of fact that lie at the heart of whether the proposed line construction would be in the public interest. The NPRC Parties also claim that TRRC should have submitted this support for its arguments in the supplemental application rather than as part of a reply, so that the public would have an opportunity to comment on the evidence. With discovery, however, the NPRC Parties claim that they can test the credulity of TRRC’s evidence.

TRRC filed a reply in opposition to the NPRC Parties’ petition, arguing that the NPRC Parties should have sought discovery after TRRC filed its supplemental application in December 2012. TRRC said it doubts that discovery would lead to any relevant evidence because Seth Schwartz of Energy Ventures Analysis, the key witness TRRC provides on rebuttal, bases his analysis of the demand for coal in various markets on publicly available data.

TRRC also notes that the procedural schedule established by the Board does not call for additional filings and that the NPRC Parties have not asked for leave to provide the agency with a further submission. Finally, TRRC argues that the NPRC Parties have failed to state any reasons why a six-month discovery period is necessary or how they intend to use that period.

On Aug. 9, TRRC submitted a reply asking that the board deny the NPRCParties’ motion for leave to file its surreply and to reject the surreply. Alternatively, TRRC requests that the board accept its attached response. Included with the response is a verified statement from Scott Long, Senior Manager Regulatory Cost for BNSF, providing information on BNSF’s traffic projections and explaining the assumptions and methodology used to generate a BNSF projected net income statement for the first two years of operation of the line, as well as an exhibit containing those projections. To safeguard what TRRC asserts is highly confidential material in that exhibit, TRRC asks the board to issue an order protecting its contents from disclosure.

As to discovery, TRRC again argues that the board should deny NPRC’s request to now conduct it. TRRC reiterates that NPRC had every opportunity to seek discovery months ago but did not do so and, in any event, contends that NPRC’s lengthy and detailed April 2 comments belie the need for any discovery here.

“This proceeding will require the Board to resolve a number of important and complex issues,” said the Aug. 27 ruling. “Further evidence might assist the agency in rendering a decision. Therefore, the NPRC Parties’ July 2 surreply and TRRC’s August 9 response will be accepted into the record, and limited discovery and subsequent submissions will be allowed. Given that some of the evidence the NPRC Parties seek is publicly available and that these commenters have already submitted a response to TRRC’s June 7 filing, the Board will provide a 90-day period for discovery rather than the 6-month period sought by the NPRC Parties. The NPRC Parties may file a reply by December 16, 2013 and TRRC may file a rebuttal by January 6, 2014.”

The board also granted the confidentiality request.

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.