Simplified Rail Rate Cases not Simple Enough

“We continue to pursue changes to the simplified guidelines that would achieve the dual statutory goals [established by Congress in 1995] of providing captive shippers meaningful access to regulatory remedies for rail rates that are unreasonable. . ..” said a decision by the Surface Transportation Board (STB Ex-Parte No. 656 Sub. No. 1).

After 10 years, no rate disputes were decided under the Simplified Guidelines. The STB proposed creating a simplified stand-alone cost (Simplified SAC) procedure to use in medium-size rate disputes. And objective of the Simplified SAC method is to restrain a railroad from exploiting market power over a captive shipper by charging more than it needs to earn a reasonable return on the replacement cost of the infrastructure used to serve that shipper. It would also detect and eliminate the costs of inefficiencies in a carrier’s investments or operations.

The Simplified SAC method is described in a Surface Transportation Board Decision dated July 28. It is available at http://www.stb.dot.gov/decisions/readingroom.nsf/WebDecisionID/37206?OpenDocument

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