[Federal Register Volume 67, Number 83 (Tuesday, April 30, 2002)]
[Notices]
[Page 21321]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-10473]



[[Page 21321]]

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DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

[STB Ex Parte No. 589]


Calculation of Variable Costs in Rate Complaint Proceedings 
Involving Non-Class I Railroads

AGENCY: Surface Transportation Board, DOT.

ACTION: Notice of Proposed Rulemaking.

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SUMMARY: The Surface Transportation Board institutes a proceeding to 
settle how it will estimate the variable costs of non-Class I railroads 
in future rate complaint proceedings.

DATES: Comments are due by July 1, 2002. Replies, if any, are due July 
31, 2002.

ADDRESSES: Send comments (an original and 10 copies) referring to STB 
Ex Parte No. 589 to: Office of the Secretary, Case Control Branch, 1925 
K Street, NW., Washington, DC.

FOR FURTHER INFORMATION CONTACT: Thomas J. Stilling, 202-565-1567. 
Federal Information Relay Service (FIRS) for the hearing impaired: 1-
800-877-8339.

SUPPLEMENTARY INFORMATION: A user of rail transportation can file a 
complaint with the Board challenging the reasonableness of a rate 
charged for common carriage rail transportation. 49 U.S.C. 11701(b). 
However, the Board may only consider the reasonableness of a challenged 
rail rate if the carrier has ``market dominance'' over the traffic at 
issue. 49 U.S.C. 10701(d)(1). The statute precludes a finding of market 
dominance if the revenue produced by the shipment at issue is less than 
180% of the defendant carrier's variable cost. 49 U.S.C. 
10707(d)(1)(A). It also specifies that the variable cost calculation be 
developed ``using the Uniform Rail Costing System [URCS] cost finding 
methodology (or an alternative methodology adopted by the Board in lieu 
thereof).'' 49 U.S.C. 10707(d)(1)(B).
    Non-Class I railroads, however, have traditionally not been 
required to maintain the necessary financial and operating data to 
enable development of variable costs using URCS. Historically, the 
average regional URCS variable costs for the Class I railroads have 
been used as a surrogate for a non-Class I carrier's variable costs. 
However, in Minnesota Power, Inc. v. Duluth, M.&I.R. Ry., STB Docket 
No. 42038, we initially ordered the defendant non-Class I railroad to 
collect the necessary operational and financial data needed to develop 
variable cost information using URCS. We later stayed that order in 
response to a petition for reconsideration, so that we could consider 
the industry-wide implications associated with the accounting/record-
keeping order. Before we ruled on the petition, the parties settled 
that rate dispute.
    The issue of whether, as a general matter, it is appropriate and 
administratively practical in rate cases involving non-Class I 
railroads to place a case in abeyance for an extended period of time 
and to subject a carrier to the expense of developing URCS-compatible 
data for a single case has therefore not been resolved. In this 
proceeding, we propose to return to a policy of estimating non-Class I 
carriers' variable costs using Class I regional average variable costs, 
and we seek comments of interested parties on this proposal and/or any 
alternative proposal they may wish to make.
    Additional information is contained in the Board's decision. To 
purchase a copy of the full decision, write to, call, or visit the 
Board's contractor, Da-To-Da Legal, Suite 405, 1925 K Street, NW., 
Washington, DC 20006, phone (202) 293-7776. [Assistance for the hearing 
impaired is available through Federal Information Relay Service (FIRS) 
at 1-800-877-8339.] The full decision is also available on the Board's 
website: www.stb.dot.gov.
    This action will not significantly affect either the quality of the 
human environment or energy conservation.
    Pursuant to 5 U.S.C. 605(b), we conclude that our action will not 
have a significant economic impact on a substantial number of small 
entities within the meaning of the Regulatory Flexibility Act.

    Decided: April 22, 2002.

    By the Board, Chairman Morgan and Vice Chairman Burkes.
Vernon A. Williams,
Secretary.
[FR Doc. 02-10473 Filed 4-29-02; 8:45 am]
BILLING CODE 4915-00-P