BNSF Railway says it’s making progress on coal delivery issues

The BNSF Railway filed a Jan. 29 update with the federal Surface Transportation Board that was less about how specifically it is dealing with coal delivery problems, and more about its procedures for addressing those problems.

The Jan. 29 report was a response to a board order, coming in a case filed by the Western Coal Traffic League, that said the BNSF needs to report on how it is dealing with the problem of apparently dozens of coal-fired power plants not getting timely deliveries of coal due to overall system congestion and equipment availability problems on the BNSF system. The BNSF is the only railroad that originates coal at the high-production mines of the Powder River Basin in Wyoming and Montana.

“As we enter the first quarter of 2015, BNSF maintains our focus on providing consistent and reliable service to our coal customers and delivering as much coal as possible into the marketplace,” said the Jan. 29 filing, authored by BNSF Executive Vice President and Chief Marketing Officer Stevan Bobb. “We continue in our efforts to maximize velocity across our network, and we have seen improvements in key performance areas like network fluidity. The most effective way to address coal stockpile fluctuations is to improve velocity across our network to a level where we are no longer managing resources to respond to critical situations.

“While we have seen the recent improvements in network fluidity benefit our coal customers in terms of rising stockpiles, we also continue in the immediate term to work with our coal customers to identify critical stockpile situations and to implement appropriate responsive measures. The Board’s December 30, 2014 order in the above-captioned service proceeding directed BNSF to provide a detailed description of the contingency plans that BNSF would use to mitigate critical shortfalls of coal. In this letter, I describe in more detail the various elements of BNSF’s ‘coal customer escalation process,’ an existing process that BNSF has utilized to address potential concerns arising from recent service issues in coal transportation. These efforts include a process for identifying customers experiencing critical stockpile levels and various tools that BNSF has available to address critical situations.

“Measures that BNSF would take in the future to deal with critical coal stockpile shortages would be an outgrowth of BNSF’s existing process modified to account for the specific circumstances of individual shippers. These contingency measures are extraordinary and costly, but they have also been effective in dealing with problems that have previously arisen. BNSF has demonstrated its ability to implement measures to effectively mitigate critical stockpile situations. As shown in Attachment A, as of January 23, 2015, BNSF has been able to add coal representing 440 days of coal burn to the coal stockpiles of customers identified as having critical stockpile shortages through the processes described here. As a result of the steady improvements that have been seen, BNSF does not believe it is necessary to consider more wide ranging changes in regulation to address the present service situation.

“In describing BNSF’s contingency planning, it is important to note at the outset that there is no one-size-fits-all, pre-prescribed formula of responsive measures for every critical stockpile situation. On the contrary, when a critical coal situation at a particular plant is identified, BNSF teams review the specific circumstances, including contributing factors, and determine which responsive actions will be most effective and appropriate to address the situation while maintaining overall network fluidity. As explained in more detail below, such actions may include heightened operational focus, equipment reallocation (including both trainsets and locomotives), increased crew coverage, rerouting, and/or gateway modifications. It may be necessary or appropriate for BNSF to activate a subset (or even just one) of these countermeasures in response to a specific critical stockpile situation. As explained in more detail below, there are a number of factors that can contribute to diminishing stockpiles, including circumstances unrelated to railroad performance.”

Bobb concluded: “The vast majority of our customers have demonstrated great patience as we work to return to the service levels that they expect from us, cooperating with us to avoid critical stockpile issues when possible and to implement appropriate measures by both parties when critical situations do arise. As the Board noted in its December 31 decision, the vast majority of our customers have stockpiles well in excess of the 20-day measure that triggers our coal customer escalation process. According to the EIA data for October 2014 cited by the Board, only 8 percent of utilities nationwide maintained stockpiles of less than 30 days. That report also does not reflect the improvements we have seen in December and January. As our service continues to improve, we look forward to our full return to consistent, reliable performance for our coal customers and a return to our normal operational and resource planning processes.”

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.