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For Immediate Release: Railroad Monopoly Abuse Washington, D.C. (Feb. 20, 2009) — Captive rail customers and consumers won an important victory in their fight against the monopoly pricing power of the major freight railroads with a rare win at the Surface Transportation Board (STB). The result was rate reductions of almost 60 percent, totaling about $345 million in benefits to electricity consumers in nine states. The rate complaint was filed in 2004 by Western Fuels Association and Basin Electric Power Cooperative against the Burlington Northern Railroad over the coal transportation rate from the Powder River Basin to the Laramie Station generating facilities located about 175 miles away in Wyoming. The victory came 1582 days after the complaint was filed and after the complainants spent upwards of $8 million prosecuting the case. “Out of a total of 16 contested rate cases brought by captive shippers to the STB since 2000, this is only the third time consumers have won meaningful relief,” said Bob Szabo, executive director and counsel of Consumers United for Rail Equity (CURE). “The electricity customers of the Laramie Station generating plant have been paying over five times the cost to the railroad of moving the coal. It shouldn’t require the patience of Job and the deep pockets of a robber baron to achieve relief from the STB in such an obvious case of monopoly abuse. Rate relief from the STB remains out of reach for the overwhelming majority of captive rail customers. We are pleased that Chairman Oberstar and Chairman Rockefeller are committed to improving the rate challenge process through legislation in this Congress.” The $345 million judgment, announced by the STB Wednesday, will benefit electricity consumers in Colorado, Iowa, Minnesota, Montana, Nebraska, New Mexico, North Dakota, South Dakota and Wyoming. “This is a victory for consumers in the states served by these utilities – but consumers across the nation, during this difficult economy, are paying more for everything from electricity to two-by-fours due to the monopoly prices the railroads are extracting from rail customers that have no transportation choices except a single freight railroad,” Szabo said. BNSF recently reported fourth quarter 2008 earnings showing revenue up by $124 million from 2007 on volumes that were down by 7 percent. “How do you get increased revenues on less volume of freight moved?” Szabo asked. “It’s called monopoly pricing power.” During the last Congress, legislation to improve the rate challenge process at the STB was introduced by House Transportation and Infrastructure Committee Chairman James Oberstar (D-MN) and Senator Jay Rockefeller (D-WV), who is now Chairman of the Senate Commerce, Science and Transportation Committee in the 111th Congress. Both Chairman Oberstar and Chairman Rockefeller appear committed to enacting legislative improvements to the policies of the STB in this Congress. Congress is also considering legislation that would eliminate the freight railroads’ exemptions from the nation’s anti-trust laws that ensure competitive markets. The Railroad Antitrust Enforcement Act, which was voted out of both the Senate and House Judiciary Committees in the last Congress, was introduced by Rep. Tammy Baldwin (D-WI) and Sen. Herb Kohl (D-WI) in the first week of the 111th Congress as H.R.233 and S.146. “There is no question that justice delayed is justice denied – and a 1,582 day wait for justice is unconscionable,” Szabo said. “The only way to correct the current inequities for rail customers is to pass the Railroad Antitrust Enforcement Act, which will ensure as much competition as possible in the rail industry, and to reform the failed policies of the Surface Transportation Board, which are failing to protect captive rail customers from railroad monopoly pricing power.” ### 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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