Passenger Trains/ Freight Rails - Use STB's "Stand-Alone Railroad" for Fair Fees ?

[Paul_D_North_Jr]

The below is largely taken from a comment that I just submitted to one of Fred Frailey's blogs from last Oct. 2010, because: it's not likely anyone will go back and read it there; it has broader application than just the UP routes under discussion there; and the audience is broader here.  I had this thought a while ago - like late last fall - but it slipped away before I could post it, so I'm doing so now while I have it 'top of mind' again . . . 

Use the Theoretical "Stand-Alone Rail Road" per STB Methodology as a Fair Measure for Passenger Train Fees on Freight Railroads

 

Those who feel that the freight railroads - such as UP for the Illinois Chicago - St. Louis or Amtrak "Sunset" routes, or CSX recently, etc. - are demanding too much money to host more passenger trains (of any kind - HSR, conventional, commuter, etc.) on their lines should consider that in rate challenges by shippers before the Surface Transportation Board, the Board sometimes bases its analysis and decision on the basis of the construction or replacement cost and operating costs of a theoretical or fictional "stand-alone railroad" (or "SARR") along the same route, then adds the appropriate percentage of profit (180% to 240% of the "variable costs" comes to mind, but I won't swear that's always the range)*.  Both Amtrak, its supporters, and UP might want to consider what would happen if that methodology were applied to the Sunset's route for the 8 additional trains to get to daily 2-way service (now just tri-weekly), etc., and what the magnitude of the resulting costs might be.  That might shed a whole lot of light on how reasonable - or unreasonable - UP is being.  And that should be a fair measure, too - after all, "What's sauce for the goose is sauce for the gander" - if that kind of formula can be used against BNSF and UP to reduce their coal rates, then the freight railroads too ought to be able to use it to support their claims for fees from Amtrak and other governmental passenger train agencies for a similar usage of their tracks.  (But if it doesn't work because their demands are way beyond what that technique will support . . . then good luck to you, gentlemen, you'll need it - but I doubt if that will come to pass.)

 

*See, for instance, STB Decision No. 39039 decided February 17, 2009 in Docket No. 42088 - Western Fuels Association, Inc. and Basin Electric Power Cooperative vs. BNSF Railway Company - esp. the "Overview" on pgs. 2 - 3, in which the 'stand-alone railroad' was named the "Laramie River Railroad" ("LRR") - at: 

   http://www.stb.dot.gov/decisions/readingroom.nsf/WebDecisionID/39709?OpenDocument   or,

 http://www.stb.dot.gov/decisions/readingroom.nsf/UNID/3FE4193782B6435085257561006F3148/$file/39709.pdf  (58 pgs., approx. 210 KB in size)

Comments and criticisms invited ! 

 

- Paul North.  

[MP173]

I read Western Fuels a couple of years ago when BNSF got taken to the woodshed over coal rates.  Not sure I am mentally prepared for another such discussion.

However, having read the article in Trains about China's hi speed rail projects...WOW.  I dont see how we can do that sort of project here.

Ed

[PNWRMNM]

Paul,

You are forgetting the first rule of the government In dealing with railroads since the days of Teddy Rosevelt which is, the government has no interest in fair or reasonable, especially when it is paying the bills.  If it did the ATK enabaling legistation would not have held the carriers to being able to recover only their marginal costs. 

To get where you propose to go will require a change to the law and a change to the principle of fair and honest dealing.  Better to hope our financial mess puts the long distance trains out of our misery, and in my opinion a much more likely outcome.

Mac