Tuesday, March 03, 2009

Circuit Court rejects shipper challenge of UP rates

Written by  Luther S. Miller, Senior Consulting Editor

In a ruling March 2, the U.S. Circuit Court of Appeals in Chicago affirmed an earlier decision by a federal court judge in Milwaukee, rejecting a claim by We Energies that Union Pacific overcharged it $23 million for coal deliveries to its Wisconsin power plants. Milwaukee-based We Energies is UP’s largest customer in the Badger State.

The appeals court said We Energies wasn't entitled to relief after UP raised rates in 2004; We sued in 2006. UP did not act in bad faith when it failed to deliver as much coal as We Energies had sought under its contract, the court ruled.

We Energies has no plans to appeal, said a company spokesman, and no changes in customer rates are expected as a result of the decision.

UP spokesman Mark Davis said, “We hope that this ends the matter involving a contract that expired several years ago."