The D.C. Circuit has issued a decision upholding the victory that Arizona Electric Power Cooperative, Inc. (“AEPCO”), achieved in its rate case at the Surface Transportation Board (“STB”) over the BNSF and UP railroads. BNSF Railway Co. v. STB, D.C. Cir. No. 12-1042 (May 23, 2014).
AEPCO brought its STB rate case in 2008, challenging the rates that BNSF and UP had established for transporting coal from New Mexico and Powder River Basin origins to AEPCO’s power plant in Arizona. The STB ruled in AEPCO’s favor in 2011. Arizona Electric Power Cooperative, Inc. v. BNSF Railway Co. & Union Pacific Railroad Co., STB Docket NO. 42113 (STB served November 22, 2011). The STB awarded AEPCO the maximum rate relief permitted under the statute.
BNSF and UP appealed the STB’s decision to the D.C. Circuit. The railroads claimed that the STB had no authority to award rate relief because the carriers had established joint rates. The D.C. Circuit rejected their arguments, finding that it was appropriate for the STB to treat the BNSF/UP joint rates in the same manner that the agency treated single-line rates under challenge in a rate case. The Court agreed with the STB that AEPCO’s stand-alone railroad was not required to replicate how BNSF and UP interchanged AEPCO’s traffic in the real world.
Questions on this decision or on railroad rate litigation generally may be directed to Robert D. Rosenberg or any other Slover & Loftus LLP attorney.