STB schedules Nov. 14 arguments on Intermountain, UP dispute

The U.S. Surface Transportation Board will hold oral argument on Nov. 14 on a complaint of Intermountain Power Agency challenging the reasonableness of rates established by Union Pacific Railroad.

The complaint covers unit train coal transportation service from a point of interchange with the Utah Railway at Provo, Utah, to IPA’s 1,800-MW plant at Lynndyl, Utah. The oral argument will be open for public observation, but only counsel for the parties will be permitted to present arguments.

IPA filed its complaint in May 2012 and filed its opening evidence in December 2012, the board noted in an Oct. 23 announcement. UP filed its reply evidence on April 12. IPA filed its rebuttal evidence on July 3 and the parties filed final briefs on Aug. 14. On Aug. 29, IPA filed an unopposed motion requesting that the board hold an oral argument in this proceeding.

In their final briefs, the parties dispute numerous issues, among them whether certain traffic in IPA’s Stand-Alone Cost model includes an improper cross-subsidy and whether the board should apply a new cross-subsidy test proposed by UP to replace the board’s existing test. Parties should focus their argument on the cross-subsidy issues in addition to any other issues they consider important, the board said.

IPA said in its Aug. 14 brief that evidence and argument in this case demonstrate that it is entitled to relief from the “excessive rates” charged by the Union Pacific for coal traffic moving to the Intermountain plant in Lynndyl. “UP’s arguments in support of the challenged rates are improper and unavailing,” IPA added.

IPA seeks a determination that UP’s rates for the transportation of coal from Provo, Utah, to IGS (in shipper-supplied high- or low-capacity railcars) exceed maximum reasonable levels under the board’s stand-alone cost (SAC) constraint. IPA also seeks the payment of reparations (plus interest) for alleged past UP overcharges since November 2012.

“This proceeding is IPA’s second challenge to the reasonableness of UP’s common carrier rates for transporting coal in unit train service from an interchange with Utah Railway Company (‘URC’) in Provo, Utah, to IPA’s [IGS] at Lynndyl, Utah,” said the UP in its own Aug. 14 brief. “IPA abandoned its first challenge in 2012, recognizing that it could not show UP’s rates were unreasonable under the assumptions that IPA made in that case.”

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.