Simplified Rail Rate Cases not Simple Enough

Aug. 2, 2006
We continue to pursue changes to the simplified guidelines that would achieve the dual statutory goals of providing

“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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