In 2009, Slover & Loftus LLP clients Western Fuels Association, Inc. and Basin Electric Power Cooperative (“WFA/Basin”) won a major victory at the Surface Transportation Board (“STB”) in Western Fuels Association, Inc. & Basin Electric Power Cooperative v. BNSF Railway Company, STB Docket No. 42088, with approximately $350 million in reparations and rate reductions granted. The defendant railroad, BNSF Railway Company (“BNSF”), appealed the agency’s decision to the Court of Appeals for the District of Columbia Circuit, where WFA/Basin again won on all issues except one: the court remanded to the STB the issue whether it should have applied its modified Average Total Cost (“ATC”) methodology to calculate cross-over traffic revenues under the agency’s Stand-Alone Cost (“SAC”) rate reasonableness test on the grounds that the agency had not specifically explained its calculation rationale.
On June 15, 2012, the Board issued its remand decision in the WFA/Basin case, upholding its previous use of a modified ATC approach, as WFA/Basin had requested, noting: “After considering the parties’ submissions on remand, we reaffirm here that the modified ATC methodology is preferable to the original ATC methodology.”
The agency otherwise discontinued the proceeding, but noted that it planned to institute a rulemaking to consider whether an alternative ATC approach might be preferable for future rail rate reasonableness proceedings. Commissioner Begeman dissented.
Questions on this decision or on railroad maximum rate reasonableness generally may be directed to John H. LeSeur or any other Slover & Loftus LLP attorney.