STB Grants $30M Rate Reduction Against UP

WASHINGTON — The Surface Transportation Board issued a decision granting an estimated $30 million in rate reductions and reparations in the maximum railroad-rate case brought before the Board by the Kansas City Power & Light Company (KCPL) against Union Pacific Railroad.

At issue in this case was KCPL’s challenge to rates charged by UP for the rail transportation of coal from Wyoming’s Powder River Basin to KCPL’s Montrose Generating Station near Ladue, Mo. The parties to this case stipulated that the maximum lawful rate should be set at 180 percent of the variable cost of providing service.

In its decision, the Board found that UP’s rates for the challenged movements all exceed 180 percent of the variable cost of providing the transportation at issue. Accordingly, the Board ordered UP to establish and maintain rates, not to exceed 180 percent of the variable cost of providing the service at issue, through the end of calendar-year 2015.

The Board also ordered UP to pay reparations plus interest to KCPL for any money previously collected for rates charged above the 180 percent of variable-cost level.