Federal board orders BNSF to report on coal service contingency planning

Responding to numerous complaints from coal-fired utilities, the federal Surface Transportation Board on Dec. 30 directed the BNSF Railway to submit a detailed description of the contingency plans the carrier would use to help mitigate an acute coal inventory shortage at one or more generating stations.

On Oct. 22, 2014, the Western Coal Traffic League (WCTL), which represents a number of electric power generators, petitioned the board to require BNSF, one of two railroads originating Powder River Basin coal, to submit to the coard a coal-specific service recovery plan, and for the board to review, approve or revise, and enforce the recovery plan. In support of its petition, WCTL stated that its electric utility members who are served by BNSF continue to experience severe service difficulties.

On Oct. 28, 2014, BNSF submitted a letter to the board, which identifies many recently completed and planned infrastructure projects which, according to BNSF, would benefit its coal franchise. The letter also details various BNSF operational and personnel initiatives to improve its transportation of coal. Additionally, BNSF outlined several of its public outreach and communications efforts, including its reporting to the board, to provide transparency to its customers regarding the status of its network. BNSF contended that preparing and filing a coal service recovery plan, as envisioned by WCTL, would not contribute materially to its customers’ perspective on its operations.

The board also received comments from several energy companies, legislators, and other interested parties generally expressing support for WCTL’s petition. Dairyland Power Cooperative cited inadequate service to its Alma, Wisconsin, coal-fired power plant that forced it to curtail electric generation and seek alternative power sources. Minnesota Power stated that it ceased operations at four electric generating units in an effort to preserve coal stockpiles. Several other power companies also commented in support of WCTL’s petition and notes low coal inventory and reduced deliveries. The American Public Power Association, Edison Electric Institute, National Association of Regulatory Utility Commissioners, and the National Rural Electric Cooperative Association jointly submitted comments and reiterated many of WCTL’s points, citing low stockpiles and vulnerable rail service as a threat to their members.

Minnesota Gov.Mark Dayton, U.S. Senator Amy Klobuchar, and U.S. Senator Al Franken also submitted comments expressing support for the WCTL petition. From Wisconsin, U.S. Senator Tammy Baldwin and U.S. Representatives Ron Kind, Sean P. Duffy, Thomas E. Petri, Reid Ribble, and Paul Ryan also wrote to the board expressing concern about coal service, requesting that, if delivery problems persist, the board require all Class I carriers to submit publicly available coal service recovery plans and monitor carriers’ progress through weekly public reporting.

Said the Dec. 30 board order: “With respect to BNSF and coal specifically, the totality of the information collected to date suggests that BNSF’s coal service has struggled, although there has been some progress in recent weeks. It is critical that the Board continue to closely monitor BNSF’s performance for indications of improving or deteriorating service. In addition to monitoring BNSF’s coal service performance via the data we collect, we will continue to hold regular meetings with BNSF senior management so that we can receive first-hand information about the challenges and progress BNSF is experiencing with respect to all service issues, including coal. Also, the Office of Public Assistance, Governmental Affairs, and Compliance (OPAGAC) will maintain its weekly calls with BNSF to discuss service issues, including the status of BNSF’s coal service. OPAGAC will continue its outreach and regular communications with counterparts at the Department of Energy (DOE) and FERC in order to share information about the coal railroad supply chain as it relates to the reliability of energy production.”

The board ordered that BNSF submit no later than Jan. 29 a detailed description of the contingency plans it would use to mitigate an acute coal inventory shortage at one or more generating stations in a region.

The board noted how there are legal issues with what WCTL wanted. “As the Board is not requiring the service recovery plan enforcement requested by WCTL, we need not reach a conclusion on BNSF’s legal objections to that remedy. We do note, however, that BNSF ha sraised a significant concern with respect to the scope of the Board’s authority over contract traffic under 49 U.S.C. § 10709. Section 10709 states that transportation provided under private contract is not subject to the Board’s governing statute; parties are not subject to statutory duties with respect to contract service; and the ‘exclusive remedy’ for breach of contract is in a court of competent jurisdiction. 49 U.S.C. § 10709(b) and (c). Given that the vast majority of coal rail traffic nationwide moves under contract, § 10709 could have an impact on the scope of any prospective relief available under the Interstate Commerce Act. At the same time, however, a carrier entering contracts ‘remains subject to [its] common carrier obligation . . . with respect to [its non-contract] traffic’ under § 10709(f). The national rail system carries both regulated and non-regulated traffic and the Board necessarily must look to the fluidity of that network.”

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.