STB 3Q report to Congress: We’re working on it

Written by William C. Vantuono, Editor-in-Chief
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In its Third-Quarter 2017 report to the Senate Committee on Commerce, Science and Transportation-Subcommittee on Surface Transportation and Merchant Marine Infrastructure, Safety and Security, the Surface Transportation Board provided an update on no fewer than nine pending STB regulatory proceedings, “matters that may be of interest”:

• Review of the General Purpose Costing System: “The Board proposes certain changes to the Uniform Railroad Costing System (URCS), specifically, in a Supplemental Notice of Proposed Rulemaking, to modify certain inputs into Phase II of URCS and to modify certain cost calculations in Phase III of URCS in order to eliminate the ‘make-whole adjustment’ in Phase III. The Board proposes certain other related changes to URCS, including proposals for locomotive unit-miles and train-miles allocations, that would result in more appropriate rail movement costs.”

• Rail Fuel Surcharges (Safe Harbor): “The Board is giving shippers, rail carriers and other interested parties the opportunity to comment on the Board’s ‘safe harbor’ standard, which allows carriers to rely on a Board-approved fuel index to measure changes in fuel prices for purposes of their fuel surcharge programs.”

• Expanding Access to Rate Relief: “The Board is considering procedures that could comprise a new rate reasonableness methodology for use in very small disputes, which would be available to shippers of agricultural products and all other commodities.”

• Review of Commodity, Boxcar, and TOFC/COFC Exemptions: “The Board proposes to revoke the existing class exemptions under 49 C.F.R. Part 1039 for (1) crushed or broken stone or rip rap; (2) hydraulic cement; and (3) coke produced from coal, primary iron or steel products, and iron or steel scrap, wastes or tailings.”

• Reciprocal Switching (“Competitive Switching Rules”): “The Board proposes regulations that would allow a party to seek a reciprocal switching prescription that is either practicable and in the public interest or necessary to provide competitive rail service, in accordance with 49 U.S.C. § 11102(c)(1).”

• Railroad Revenue Adequacy: “The Board is exploring its methodology for determining railroad revenue adequacy, as well as the revenue adequacy component used in judging the reasonableness of rail freight rates.”

• Expediting Rate Cases: “As mandated by the Surface Transportation Board Reauthorization Act of 2015, Pub. L. No 114-110, the Board is assessing procedures that are available to parties in litigation before courts to expedite rate litigation and consider the potential application of any such procedures to rate cases. The Board is also assessing whether there are additional changes to the SAC case process that could help the Board meet the expedited timeline for a final decision established under the STB Reauthorization Act.”

• Revisions to the Cost-of-Capital Composite Railroad Criteria: “To better reflect the current marketplace, the Board is proposing to update one of the screening criteria used to create the ‘composite railroad’ for the Board’s annual cost-of-capital determination. Specifically, the Board proposes that one of its screening criteria now require a company’s stock to be listed on either the New York Stock Exchange (NYSE) or the Nasdaq Stock Market (NASDAQ), rather than be listed on either the NYSE or American Stock Exchange (AMEX), as the AMEX is no longer in existence.”

• Ex Parte Communications in Informal Rulemaking Proceedings: “The Board is proposing to modify its regulations to permit, subject to disclosure requirements, ex parte communications in informal rulemaking proceedings. The Board is also proposing other changes to its ex parte rules that would clarify and update when and how interested persons may communicate informally with the Board regarding pending proceedings other than rulemakings. The intent of the proposed regulations is to enhance the Board’s ability to make informed decisions through increased stakeholder communications while ensuring that the Board’s record-building process in rulemaking proceedings remains transparent and fair.”

STB’s quarterly progress reports are a requirement of the STB Reauthorization Act of 2015.

Download the entire 3Q17 STB report at the link below.

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