CURE :: Consumers United For Rail Equity

September 2009

In This Issue

Seminole Electric Cooperative Files Evidence CSX "Has Been Severely Overcharging Them"
Duluth News Tribune Editorial Page Carries Forum On Rail Reform
WSJ: Recession Finally Hits Home Down On The Farm
Noted and Quoted

Seminole Electric Cooperative Files Evidence CSX "Has Been Severely Overcharging Them"

On August 31, Seminole Electric Cooperative, a Tampa-based group of 10 member cooperatives providing power to more than 1.7 million people and businesses throughout most of Florida, filed evidence with the STB demonstrating that CSX had been "severely overcharging" them for coal transportation. According to the Jacksonville Business Journal’s Trade, Trucks & Trains blog, Seminole’s customers are facing rate increases this year totaling $100 million.

The evidence supports a complaint first filed in October 2008 on CSX’s proposed rates, which went into effect over Seminole’s objections on January 1, 2009. Seminole’s filing shows that CSX’s rates for shipping coal from the Illinois Basin and Appalachia are "68%-101%" higher than the maximum allowed by the STB. Rates on some shipments from Charleston, SC, are shown to be a whopping 240% higher than STB maximum.

Seminole CEO Tim Woodbury said in a news release that "CSXT is charging more than $40.00 per ton for a service that should cost our consumers less than $20.50 per ton" and noted that those costs feed the cooperative’s total cost of energy. Woodbury concluded by saying "This is the consequence of CSXT’s monopoly over coal transportation to our station and highlights why we need effective regulatory relief from the STB." CURE issued a news release about the filing.

Duluth News Tribune Editorial Page Carries Forum On Rail Reform

Compelled by the case made by representatives of Gopher CURE at a recent meeting, the Editorial Board of the Duluth News Tribune invited Amy Fredregill to submit an op-ed for a point-counterpoint exchange with BNSF on the issue of rail reform. The paper provided a brief editorial introduction to the pieces, saying "The debate is a good one and is playing out not only on the Opinion pages of the News Tribune but on the floors of Congress in Washington, D.C."

A key paragraph – especially in light of the subsequent Seminole filing -- is:

"Unfortunately, freight rail companies also currently have unchecked power to extract exorbitant rates from companies and electric utilities that have no choice but to pay. As a result, consumers pay excessive rates for electricity while struggling businesses are squeezed, putting jobs at risk."

The entire op-ed can be found on the CURE homepage.

WSJ: Recession Finally Hits Home Down On The Farm

On August 28th, the Wall Street Journal reported on a USDA forecast that U.S. farm profits will fall 38% in 2009 from their 2008 levels and that as a result farmers are seeking additional assistance from the federal government. Other news outlets carried the story as well. This highlights the squeeze farmers are facing between falling prices and exorbitant shipping costs.

CURE submitted a letter to the editor of the Wall Street Journal, in which Executive Director Bob Szabo wrote, "[r]estraining railroad monopoly power will result in lower rail rates that will result in more income for farmers." CURE is also using this USDA report as an opportunity to share information about rail reform with members of Congress from farm states.

Noted and Quoted

"Consumers pay when railroads are allowed to exploit their monopoly protections. Congress has the power to restore fairness and protect consumers by removing those monopoly protections."

-Tim Woodbury, Seminole Electric Cooperative