[Federal Register Volume 74, Number 56 (Wednesday, March 25, 2009)]
[Notices]
[Page 12929]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-6622]


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DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

[STB Ex Parte No. 290 (Sub-No. 4)]


Railroad Cost Recovery Procedures--Productivity Adjustment

AGENCY: Surface Transportation Board.

ACTION: Adoption of a railroad cost recovery procedures productivity 
adjustment.

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SUMMARY: In a decision served on February 5, 2009, we proposed to adopt 
1.012 (1.2% per year) as the measure of average change in railroad 
productivity for the 2003-2007 (5-year) averaging period. This value 
represented no change from the current measure of 1.2% that was 
developed for the 2002-2006 period. The decision stated that comments 
may be filed addressing any perceived data and computational errors in 
our calculation. It also stated that, if there were no further action 
taken by the Board, the proposed productivity adjustment would become 
effective on March 1, 2009.\1\
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    \1\ Since 1989, the cost recovery procedures have required that 
the quarterly rail cost adjustment factor (RCAF) be adjusted for 
long-run changes in railroad productivity. The ICC Termination Act 
of 1995 continues this requirement (49 U.S.C. 10708, as revised). 
The long-run measure of productivity is computed using a 5-year 
moving geometric mean. See Productivity Adjustment-Implementation, 9 
I.C.C.2d 1072 (1993).
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    On February 23, 2009, the Board received comments from the 
Association of American Railroads (AAR). AAR noted that that they could 
not check the computation of the productivity value without access to 
certain input data. To ensure that release of this data would not 
violate our confidentiality practices, we conducted additional analysis 
of the data AAR referenced. In that review, we found inconsistencies in 
our application of the program processes used to compute our most 
recent estimate of productivity change. Therefore, we reopened this 
proceeding based on material error under 49 U.S.C. 722(c) to correct 
these inconsistencies and issued a modified annual productivity 
decision on March 20, 2009. We find that the increase in productivity 
in 2007 should have been reported as 1.018 instead of 1.004. As a 
result, the 5-year geometric mean of the annual change in productivity 
is 1.015 (or 1.5% per year), not 1.012 (or 1.2% per year), as 
originally reported.
    In its comments, AAR also requested that we eliminate reference to 
the arithmetic mean over the previous five years, as that mean is not 
required by regulation. We had originally reported the 2003-2007 
productivity growth using both an arithmetic and geometric mean. The 
AAR is correct to note that the arithmetic mean is not used in any 
required applications and can be a source of confusion. Therefore, we 
will no longer publish the arithmetic mean in future Ex Parte No. 290 
(Sub-No. 4) decisions.

DATES: Effective Date: The productivity adjustment is effective March 
20, 2009.

FOR FURTHER INFORMATION CONTACT: Pedro Ramirez, (202) 245-0333. 
[Federal Information Relay Service (FIRS) for the hearing impaired: 1-
800-877-8339.]

SUPPLEMENTARY INFORMATION: Additional information is contained in the 
Board's decision, which is available on our Web site http://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: March 20, 2009.

    By the Board, Chairman Mulvey, and Vice Chairman Nottingham.
Jeffrey Herzig,
Clearance Clerk.
[FR Doc. E9-6622 Filed 3-24-09; 8:45 am]
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