WATCHING WASHINGTON, RAILWAY AGE APRIL 2020 ISSUE: Although shippers lacking effective transportation alternatives to rail are relatively few, the Surface Transportation Board (STB) exists to protect them from market-power abuse, as railroads earn substantial margins from the traffic.
Surface Transportation Board
“When the facts change, I change my mind. What do you do, sir?” — John Maynard Keynes
The Clean Water Act (CWA) imposes permitting obligations on “point sources.” Should those obligations apply to railroad cars, which move freely from state to state? The U.S. railroad industry, through the Association of American Railroads, has asked the Surface Transportation Board to take up the question and to rule that any CWA permitting obligations are preempted by the Interstate Commerce Commission Termination Act.
While talk of Presidential impeachment is difficult to avoid, probably few can recite how the impeachment of a federal judge in 1912 helped to secure the independence of the Interstate Commerce Commission (ICC) and its Surface Transportation Board (STB) successor.
On 74 acres in central Virginia, there graze for commercial production some two-dozen Himalayan yaks—a largely fat-free, shaggy, handlebar-horned and oft cantankerous animal first imported to North America during the 19th century. If the connection of yak and its fat to transportation economic regulation is not obvious, blame your youth, as more than half a century has passed since the Great Yak Fat Caper of 1965 entered railroad lore—a dirty-trickster’s fraud now indelibly stained on the Interstate Commerce Commission’s (ICC) reputation, and, by association, its Surface Transportation Board (STB) successor.
Dr. William Huneke, Consulting Economist, offered his opinion in the Railway Age report STB “Whack a Mole.” As he pointed out, the Surface Transportation Board in the past rarely had time or staff to do more than react to the latest rate case, stakeholder petition or Congressional request. He described a sense of Whack a Mole in the flurry of STB regulatory reform proposals, particularly STB’s tinkering with the industry cost of capital calculation.
One expects better from the scholarly American Enterprise Institute (AEI), which on Oct. 9 published an essay recommending folding the independent Surface Transportation Board (STB) into the politicized Executive Branch Department of Transportation (DOT).
NEWS ITEM: The Surface Transportation Board (STB) proposes to change the formula for computing the cost of the equity component of the railroad industry’s cost of capital. This is of consequence to railroads, shippers and investors because cost of capital is a determinant of railroad revenue adequacy and a threshold for a host of other regulatory limitations on rail ratemaking.
Is presumptive Surface Transportation Board (STB) nominee Robert Primus pulling a Reese H. Taylor Jr. redux and risking his chance for nomination or Senate confirmation?
The Surface Transportation Board (STB) recently issued three separate notices with regards to demurrage.