Western Coal Traffic League offers comments on STB cost changes

The Western Coal Traffic League, which represents a number of coal-fired power producers, on Sept. 5 filed reply comments with the U.S. Surface Transportation Board in an ongoing review of the board’s Uniform Railroad Costing System (URCS).

The board is looking at possible changes in the URCS to produce more accurate costs, with the railroads and shippers lining up against each other, since the change in cost calculations can alter shipping rates. “In order to achieve this objective, the Board must fully capture the efficiencies inherent in the unit train transportation of western coal,” the league said.

WCTL 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 to take in this proceeding, so WCTL limited its comments to addressing the proposals the board has put forward.

WCTL said it generally has no theoretical objections to most of the board’s proposals. “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.”

WCTL said it continues to strongly object 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 these 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 wrote.

Western coal, much of it from the Powder River Basin, moves in dedicated unit trains that cycle between origin and destination. 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 said.

The league also continues to urge the board not to eliminate appropriate switching-related efficiency adjustments when calculating the equipment costs for the use of railroad-owned equipment. WCTL also requests that the board reject alternative proposals put forward by the Association of American Railroads and Union Pacific railroad to calculate switching costs. “These convoluted procedures produce absurd results when applied to unit train movements,” WCTL added.

WCTL members are shippers of coal mined west of the Mississippi River that is transported by rail. Members currently ship and receive in excess of 175 million tons of coal by rail each year. WCTL’s members are: Ameren Energy Fuels and ServicesArizona Electric Power CooperativeCLECO Corp., Austin Energy (City of Austin, Texas), CPS EnergyEntergy ServicesKansas City Power & LightLower Colorado River AuthorityMidAmerican EnergyMinnesota PowerNebraska Public Power DistrictOmaha Public Power DistrictTexas Municipal Power AgencyWestern Fuels Association and Wisconsin Public Service Corp.

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.