DM&E Denied $2.5 Billion Taxpayer Backed Loan

[zardoz]

I don't know if this kills the PRB dream. In our legal system there always seems to be an appeal. I appeal the appeal of your appeal... or something. Perhaps this motivates the DME. If they do have the private money, then build away and show the FRA that the loan could have been repayed. If there's any money left over... build a big loop around the Mayo Clinic.

CC

A 10-mph, 9-degree curved loop, so the flanges can squeal all day long; slowly, slowly, the high-pitched noise will penetrate the brains of the NIMBY's and cause a cerebral meltdown.

[garyla]

From a political standpoint, perhaps that'll be what's necessary to get this built.  But my gut-level reaction is to force it down the clinic's collective throat.  (Sorry, everyone.)

I'm still at a loss to understand why that formerly respected non-profit had to sully itself by getting so deeply involved in this.  Someone there surely has another axe to grind.

[Murphy Siding]

I still fail to understand why if this is such an awesome undertaking why cant private funds be found.

  A good guess, is that Government funds would be at a lower interest rate than private funds. (Probably due to the possibility of higher risk?)

[youngengineer]

I still fail to understand why if this is such an awesome undertaking why cant private funds be found. Maybe because the cost of bringing coal out of PRB is far greater than 2 billion and the savings to the electric companies are not there. I believe the BN spent close to 2 billion(I could be wrong but I 'm pretty sure it was a lot of money, enough to make the railroad worry, that it might go bankrupt if it didn't work.) to open the PRB in the 80's. I find it hard to believe that the DM&E could do it for that amount today.

Plus if the railroads are over charging customers and the 2 are doing this together I believe there are laws against this. Once again the private sector is being charged with a serious crime of colusion without proof. The reason for rate increases is due to the fact that they have been undercharging for years. The railroads have not reaped great sums of money off the PRB but rather have made a modest profit.

 

[Chris30]

I don't know if this kills the PRB dream. In our legal system there always seems to be an appeal. I appeal the appeal of your appeal... or something. Perhaps this motivates the DME. If they do have the private money, then build away and show the FRA that the loan could have been repayed. If there's any money left over... build a big loop around the Mayo Clinic.

CC

[Anonymous]

I don't think the idea was that DM&E would directly subsidize the electric consumer.  But I have heard the premise that DM&E could deliver coal to certain areas at a lower price than what is currently available, so the cheaper coal would reduce the cost of electric power in those areas.

[Murphy Siding]

Or are their monopolistic abuses and cross-subsidization of the Red Chinese economy a God-given Constitutional right?

    Slow down there Dave.  You're going to work yourself into a tizzy!  I didn't say I agreed with how this worked out.  All I'm saying is, I'm not too surprised how this worked out.  It's far to easy to dismiss people for being stupid, because they don't see things as you do .  It's far harder to convince people to see things your way.  If DM&E had convinced enough people,this would have been a slam-dunk.

[Murphy Siding]

    Any money taken from the coffers of UP or BNSF would end up in the hands of DM&E, (or,more likely)DM&E's bankers, or the utility companies. 

How exactly was money being "taken from the coffers" of UP and BNSF?  I didn't realize that UP and BNSF were being taxed to pay for the DM&E loan.

  Perhaps coffers is the incorrect word in this case.  How about "bank account" instead?  DM&E was planning on making some of the profit that UP and BNSF are making.  To see it any different way is kind of a stretch.  No one along the way said that DM&E would pass that money on to electrical consumers.

[TH&B]

I heard on the radio that the FRA denied the loan to the DM&E.  Thank goodness the taxpayer isn't going to be left holding the bag for a railroad that goes bankrupt when they can't steal the business from the UP or BNSF.  Of course it may get appealed.

 

Some how the taxpayer will still be holding the bag, the taxpayer always does.

[Anonymous]

    Any money taken from the coffers of UP or BNSF would end up in the hands of DM&E, (or,more likely)DM&E's bankers, or the utility companies. 

How exactly was money being "taken from the coffers" of UP and BNSF?  I didn't realize that UP and BNSF were being taxed to pay for the DM&E loan.

 

Or are their monopolistic abuses and cross-subsidization of the Red Chinese economy a God-given Constitutional right?

[Murphy Siding]

.... so in the mean time, the poor tax payer is going to pay through the nose by virtue of ever increasing utility rates, driven by massive rate increases from UP and BNSF for transportation of coal from the Powder River Basin, because there isn't currently enough capacity to create actual competition and therefore, they can take rate hikes in excess of 80% and you get to pay that, in the form of your electric bill.  I've been at hearings involving utilities, RR's and Gov't officials and the utilities are citing increases in excess of 80%.   Why?  Because the RR's (UP and BNSF) can, because they're the only game out there.

    I have a hard time believing that a DM&E line to the PRB would lower anybody's electric bill.  Any money taken from the coffers of UP or BNSF would end up in the hands of DM&E, (or,more likely)DM&E's bankers, or the utility companies.  Yes, it might cut into UP and BNSF profits, but no one has shown for sure that the, electic consumer would save a dime.  If that had been proven, there might have been a lot more positive discussion.

[Anonymous]

I heard on the radio that the FRA denied the loan to the DM&E.  Thank goodness the taxpayer isn't going to be left holding the bag for a railroad that goes bankrupt when they can't steal the business from the UP or BNSF.  Of course it may get appealed.

.... so in the mean time, the poor tax payer is going to pay through the nose by virtue of ever increasing utility rates, driven by massive rate increases from UP and BNSF for transportation of coal from the Powder River Basin, because there isn't currently enough capacity to create actual competition and therefore, they can take rate hikes in excess of 80% and you get to pay that, in the form of your electric bill.  I've been at hearings involving utilities, RR's and Gov't officials and the utilities are citing increases in excess of 80%.   Why?  Because the RR's (UP and BNSF) can, because they're the only game out there.

Why do people think that there's a free ride out there?  Considering the billions of coal revenue UP and BNSF generate annually (25-35% of their annual $26B collective revenue), that's about $6B every year,  wouldn't $2B once to DME to create some competition be a good thing?

 

I think this controversy had a lot more to do with coal than it did with coal trains or federal loans.  I cannot say whether competition would have held electric rates down, but the biggest force to push those rates up will be government mandates to go green and switch to wind and solar electric power.  I wonder if Mayo would have objected to trainloads of windmills.

[wallyworld]

I heard on the radio that the FRA denied the loan to the DM&E.  Thank goodness the taxpayer isn't going to be left holding the bag for a railroad that goes bankrupt when they can't steal the business from the UP or BNSF.  Of course it may get appealed.

.... so in the mean time, the poor tax payer is going to pay through the nose by virtue of ever increasing utility rates, driven by massive rate increases from UP and BNSF for transportation of coal from the Powder River Basin, because there isn't currently enough capacity to create actual competition and therefore, they can take rate hikes in excess of 80% and you get to pay that, in the form of your electric bill.  I've been at hearings involving utilities, RR's and Gov't officials and the utilities are citing increases in excess of 80%.   Why?  Because the RR's (UP and BNSF) can, because they're the only game out there.

Why do people think that there's a free ride out there?  Considering the billions of coal revenue UP and BNSF generate annually (25-35% of their annual $26B collective revenue), that's about $6B every year,  wouldn't $2B once to DME to create some competition be a good thing?

 

I think the result clearly demonstrates that the public good is once again determined by proxy in the form of special minority interests who cannot see beyond their own back yard. I have the sense that those that are surprised at the ultimate disposition of this matter are in the minority. The age in which enterprise and the expansion of infrastructure was held hand in glove by the larger community has long since left the station. Small well funded groups who view themselves as the arbiters of the majority's disposition have won a major victory. I can't help but reflect back to that day at Promontory a long time ago whose completion was rung by telegraph around the country. Now that is a quaint footnote ridiculed in anti-pollution commercials. Here we are, and there we were.   

[eolafan]

Stupidity, sheer stupidity!

[Dakguy201]

Mayo (quietly) in the past year has put two out of work politicans on its Board, but I believe their real function was to lobby against this deal.  They are former Senator Tom Dashle and former Representative Bill Janklow. 

Both previously represented South Dakota, and I think they have done the state a major disservice, but I guess that is what you can expect from politicans. 

[Doublestack]

I heard on the radio that the FRA denied the loan to the DM&E.  Thank goodness the taxpayer isn't going to be left holding the bag for a railroad that goes bankrupt when they can't steal the business from the UP or BNSF.  Of course it may get appealed.

.... so in the mean time, the poor tax payer is going to pay through the nose by virtue of ever increasing utility rates, driven by massive rate increases from UP and BNSF for transportation of coal from the Powder River Basin, because there isn't currently enough capacity to create actual competition and therefore, they can take rate hikes in excess of 80% and you get to pay that, in the form of your electric bill.  I've been at hearings involving utilities, RR's and Gov't officials and the utilities are citing increases in excess of 80%.   Why?  Because the RR's (UP and BNSF) can, because they're the only game out there.

Why do people think that there's a free ride out there?  Considering the billions of coal revenue UP and BNSF generate annually (25-35% of their annual $26B collective revenue), that's about $6B every year,  wouldn't $2B once to DME to create some competition be a good thing?

 

[Murphy Siding]

     After watching the 10:00 local news tonight, I would come to the conclusion that, for better or worse,  DM&E's PRB dream is over.

[CShaveRR]

I wonder how many of those private sources will back out now.  I would think that action such as this would cause a lot of confidence to be lost.

[garyla]

The company claimed to have the private financiers available if the loan didn't go through, so maybe this is just as well.  Better to do it with private money anyway!

This probably will have little effect on the politicking which is going on with regard to Rochester, the Mayo Clinic, etc.  There's more at work here than concerns about public financing, traffic, noise, and dust.

[mikevandenberg]

I believe I heard on NPR that it cannot be appealed. 

[ericboone]

Here's an article from Trains.com

http://www.trains.com/trn/default.aspx?c=a&id=1557

[ericboone]

I heard on the radio that the FRA denied the loan to the DM&E.  Thank goodness the taxpayer isn't going to be left holding the bag for a railroad that goes bankrupt when they can't steal the business from the UP or BNSF.  Of course it may get appealed.