For Immediate Release:                        
www.railcure.org                                 

Reps. Conyers, Baldwin Call for Rail Reform in Stimulus Bill
Measure Would Protect Consumers from Runaway Rail Prices

Washington, D.C. (Nov. 18, 2008) – Consumers United for Rail Equity (CURE) applauds the efforts of House Judiciary Committee Chairman Rep. John Conyers (D-MI) and Judiciary Committee member Rep. Tammy Baldwin (D-WI) who are calling on Congress to protect consumers, farmers and our rural communities from railroad monopoly abuses as part of any economic stimulus package.

In a letter to House Speaker Nancy Pelosi, Reps. Conyers and Baldwin said consumers are paying higher prices for energy and other goods because of unrestrained railroad monopoly pricing power.  They urged the Speaker to include legislation in the economic stimulus package that would place the railroads under the same antitrust laws as all other U.S. companies, from which they are now largely exempt.  This legislation, the Railroad Antitrust Enforcement Act, was passed by both the House and Senate Judiciary Committees this year on bipartisan voice votes, with no opposition, and was reported to the floors of both chambers with the recommendation of both committees that this legislation be adopted.

Following is the text of the letter from Reps. Conyers and Baldwin to Speaker Pelosi:

Dear Madam Speaker:

We are writing to encourage you to include legislation in the upcoming stimulus package that will help restrain the cost of energy and other goods during this period of extreme financial difficulty for American families.

Our national rail system is dominated by four major railroads that are exempt from some of the most important aspects of the nation’s antitrust laws. The result is a lack of competition in freight rail transportation that is adversely affecting American consumers, as well as our nation’s agricultural and manufacturing sectors. As our nation’s economy falters and American households try desperately to make ends meet, these four railroads announced record third quarter profits that are all at least 30% above the same period last year. These significant profits were earned even as the railroads reported that they are moving less freight than a year ago. Wall Street analysts have attributed these substantial increases in profits to railroad “pricing power.”

As an example, last week, Seminole Electric, a rural electric cooperative in
Florida that generates electricity from coal, reported that its electricity costs will increase $100 million per year due to the doubling of its coal haulage bill from the only railroad available to move its coal. This railroad reported third quarter profits this year that are 40% above the profits for the same period last year. More troubling is the fact that the $100 million annual cost increase will be paid by 1.7 million electricity customers in Florida, who are already suffering under economic strain.

An important first step in protecting American consumers, agriculture and manufacturers from these steep rail freight increases is to enact the Railroad Antitrust Enforcement Act of 2007, H.R.1650, as part of the economic stimulus package. This legislation has been reported by a voice vote of the House Judiciary Committee, without opposition. Companion legislation, S.772, was reported last year by the Senate Judiciary Committee, again by voice vote and without opposition.

Madam Speaker, as Congress continues to address the problems created in part by a lack of regulation and oversight in the largest financial institutions in America, we think the time is right to ensure antitrust compliance by our nation’s railroads. Their current unrestrained pricing power over America’s consumers is hurting our economy and our country, and must be addressed.

Thank you for your consideration. We look forward to working with you.

Sincerely,

Tammy Baldwin                               John Conyers, Jr.
Member of Congress                       Chairman, House Judiciary Committee

CURE has also made available the signed copy of the letter from Reps. Conyers and Baldwin to Speaker Pelosi.

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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