[Federal Register Volume 77, Number 35 (Wednesday, February 22, 2012)]
[Notices]
[Pages 10618-10619]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-4049]


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DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

[Docket No. FD 33506]


Western Coal Traffic League--Petition for Declaratory Order

AGENCY: Surface Transportation Board, DOT.

ACTION: Notice of public hearing.

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SUMMARY: The Surface Transportation Board (Board) instituted a 
declaratory order proceeding on September 28, 2011, Western Coal 
Traffic League--Petition for Declaratory Order, FD 35506 (STB served 
Sept. 28, 2011), and will hold a public hearing to explore the effect 
of the price that Berkshire Hathaway, Inc. (Berkshire) paid to acquire 
BNSF Railway Company (BNSF) in 2010 on the Board's annual Uniform Rail 
Costing System (URCS) and revenue adequacy determinations, with respect 
to BNSF.

DATES: The hearing will begin at 9:30 a.m., on Thursday, March 22, 
2012, in the Board's hearing room at the Board's headquarters located 
at 395 E Street SW., Washington, DC. The hearing will be open for 
public observation. Anyone wishing to participate at the hearing shall 
file with the Board a notice of intent to participate (identifying the 
party, the proposed speaker, and the time requested), and a summary of 
the intended testimony (not to exceed 3 pages), no later than Tuesday, 
March 6, 2012. All witnesses are encouraged to use their hearing time 
to call attention to the points they believe are particularly 
important. Witnesses should present a short oral statement of their 
comments and be prepared to answer questions from the Board.

ADDRESSES: All filings may be submitted either via the Board's e-filing 
format or in the traditional paper format. Any person using e-filing 
should attach a document and otherwise comply with the instructions at 
the ``E-FILING'' link on the Board's www.stb.dot.gov Web site. Any 
person submitting a filing in the traditional paper format should send 
an original and 10 copies of the filing to: Surface Transportation 
Board, Attn: Docket No. FD 35506, 395 E Street SW., Washington, DC 
20423-0001.
    Copies of written submissions will be posted to the Board's Web 
site and will be available for viewing and self-copying in the Board's 
public docket room, Suite 131. Copies of the submissions will also be 
available (for a fee) by contacting the Board's Chief Records Officer 
at (202) 245-0238 or 395 E Street SW., Washington, DC 20423-0001.

FOR FURTHER INFORMATION CONTACT: Valerie Quinn at (202) 245-0382. 
Assistance for the hearing impaired is available through the Federal 
Information Relay Service (FIRS) at (800) 877-8339.

SUPPLEMENTARY INFORMATION: In this proceeding, the Western Coal Traffic 
League (WCTL), and other parties,\1\ argue that the Class I Railroad 
Annual Report submitted by BNSF to the Board for the year ending 
December 31, 2010 (2010 R-1), produces a write-up in BNSF's net 
investment base for URCS costing purposes equal to $8.1 billion \2\ and 
a decrease in BNSF's 2010 annual depreciation calculations by $128 
million, both based on the $43 billion that Berkshire paid to acquire 
BNSF. WCTL also argues that the $8.1 billion write-up increases BNSF's 
variable costs, and raises the quantitative jurisdictional threshold 
for rate reasonableness proceedings, thus decreasing the number of 
shippers that could pursue rate cases before the Board, as well as 
decreasing the

[[Page 10619]]

maximum rate relief that shippers could be awarded. In addition, WCTL 
claims that the inclusion of the acquisition premium in the calculation 
of BNSF's rate of return on its 2010 net investment moves BNSF further 
away from a Board determination that the carrier is revenue adequate, 
thus making it less likely for captive shippers to obtain relief in 
BNSF rate cases. WCTL further argues that the Board's financial 
accounting rules and Generally Accepted Accounting Principles (GAAP) do 
not govern regulatory rulemaking, and that the Board is not required to 
follow GAAP in determining the scope of its regulatory jurisdiction. 
WCTL therefore suggests that the Board should exercise its authority 
under 49 U.S.C. 10707(d)(1)(B) to adjust BNSF's URCS costs starting in 
2010, by removing the $8.1 billion write-up from BNSF's 2010 R-1, and 
by making the appropriate corresponding adjustments to annual 
depreciation.
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    \1\ For convenience, in this decision we will refer to the 
arguments made by WCTL, and other supporting parties, largely within 
the context of WCTL's pleadings.
    \2\ In its opening evidence filed on October 28, 2011, WCTL 
states that it initially calculated the acquisition premium as 
$7.625 billion, but based on new information received from BNSF, 
WCTL has revised this figure to $8.1 billion. See WCTL Opening 2 
n.1.
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    BNSF counters WCTL's claims by arguing that the Board's precedent 
on this subject is well-settled, as the Board, the Interstate Commerce 
Commission (the Board's predecessor agency), the Railroad Accounting 
Principles Board, and the courts have determined that acquisition cost 
is an economically accurate measure of current market value. BNSF 
argues that the issue of the acquisition premium raised by WCTL has 
been litigated and resolved in favor of GAAP accounting. BNSF further 
claims that WCTL has presented no evidence or argument that merits 
revisiting the use of the Berkshire acquisition cost for URCS costing 
or any other regulatory purpose. Board Releases and Live Video 
Streaming Available Via The Internet: Decisions and notices of the 
Board, including this notice, are available on the Board's Web site at 
www.stb.dot.gov. This hearing will be available on the Board's Web site 
by live video streaming. To access the hearing, click on the ``Live 
Video'' link under ``Information Center'' at the left side of the home 
page beginning at 9 a.m. on March 22, 2012.
    This action will not significantly affect either the quality of the 
human environment or the conservation of energy resources.
    It is ordered:
    1. A public hearing in this proceeding will be held on Thursday, 
March 22, 2012, at 9:30 a.m., in the Surface Transportation Board 
Hearing Room, at 395 E Street SW., Washington, DC, as described above.
    2. By Tuesday, March 6, 2012, anyone wishing to participate at the 
hearing shall file with the Board a notice of intent to participate 
(identifying the party, the proposed speaker, and the time requested), 
and a summary of the intended testimony (not to exceed 3 pages).
    3. This decision is effective on the date of service.

    By the Board, Rachel D. Campbell, Director, Office of 
Proceedings.
Jeffrey Herzig,
Clearance Clerk.
[FR Doc. 2012-4049 Filed 2-21-12; 8:45 am]
BILLING CODE 4915-01-P