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For Immediate Release:
Washington, D.C. (January 8, 2009) — Legislation to eliminate the millions of dollars in hidden railroad taxes paid by U.S. consumers every year for everything from electricity to food was introduced this week in both the House and Senate. The Railroad Antitrust Enforcement Act, introduced by Sen. Herb Kohl (D-WI) and Rep. Tammy Baldwin (D-WI), would increase market competition and restore fairness to the freight rail industry. The legislation, S. 146 in the Senate and H.R. 233 in the House, will remove the railroads’ exemption from antitrust law, and place the industry under the same antitrust enforcement laws as all other U.S. businesses. Sen. Kohl, chairman of the Senate Antitrust Subcommittee, said his bill will bring much-needed scrutiny to freight railroads and encourage competition in the industry. “Freight railroads have the luxury of being protected from the competition other industries face. They can name their price and the consumer pays,” Kohl said. “We have seen the result of this outdated policy in Wisconsin, where our utilities were forced to absorb staggering cost increases for shipping coal.” Under the current exemption, U.S. freight railroads have consolidated to four regional monopolies carrying 90 percent of the nation’s freight rail traffic. These railroads routinely exert their market power through increased shipping rates and poor service for captive rail shippers. “This legislation is long overdue and absolutely necessary to begin to end the railroad monopolies that are driving consumer prices up and service down,” Baldwin said. “This virtual monopoly by the freight rail industry is unnecessary, unfair, and unacceptable. It’s time for Congress to apply our antitrust laws more equitably and I’m optimistic that this legislation will be on track for passage this session of Congress.” An example of this railroad monopoly abuse in Florida emphasizes the need for federal rail reform legislation. CSX Railroad has demanded a doubling of its rate for shipping coal which will increase consumers’ electricity bills in Florida by $100 million in 2009. CSX has demanded these higher shipping rates from Seminole Electric, an electric cooperative that produces electricity for 1.7 million Floridians. Seminole Electric is a captive shipper with access to only CSX rail lines, so increases by CSX in shipping rates will result in higher monthly electricity bills for consumers. Kohl and Baldwin’s legislation would remove the antitrust exemption that allows CSX and other railroads to exert this monopoly power. Legislation identical to the bills introduced this week was unanimously approved in the last session of Congress in both the House and Senate Judiciary committees. In addition, last year Congress called for a study on the impact of poor rail service and high rail prices on rural America. The language was included in the 2008 Farm Bill by Rep. Tim Walz (D-MN), who is also an original cosponsor of the antitrust legislation. “With our economy on the rocks, the last thing our farmers, small businesses, manufacturers and local utility companies need is to be forced into paying monopoly rates for their rail service,” Walz said. “This bill will help apply our antitrust laws fairly, putting consumers first. That’s why I am committed to seeing this legislation become law this session." This year’s legislation also has the backing of a broad coalition of organizations representing consumers, businesses, rural America, legal experts, and regulators. Those organizations include the Consumer Federation of America, the National Rural Electric Cooperative Association (NRECA), Edison Electric Institute, the American Chemistry Council, American Forest and Paper Association, the National Farm Bureau Federation, Farmers Union, the Antitrust Section of the American Bar Association, the National Association of Regulatory Utility Commissioners, and the National Association of State Utility Consumer Advocates. “In our corner we have a cross-section of America and a bipartisan coalition of lawmakers seeking to shed light on the rail industry’s abusive practices that are increasing railroad profits at the expense of U.S. consumers,” said Glenn English, Chairman of Consumers United for Rail Equity and CEO of NRECA. “We have more momentum than ever before to pass this legislation into law this year.” ### Consumers United for Rail Equity (CURE) represents a wide variety of rail customers including public utilities, rural electric co-ops, agriculture groups, as well as chemical, ethanol, cement, forest and paper companies, and other manufacturers. For more information about CURE visit: www.railcure.org |
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