Daily Rules, Proposed Rules, and Notices of the Federal Government
By a letter dated September 13, 2012, in response to an inquiry from the Board, Berkshire stated that it owned or controlled CBEC and WCTU at the time of Berkshire's acquisition of BNSF in February 2010,
The Board responded to Berkshire in a letter dated September 18, 2012, stating that Berkshire is not permitted to own or control multiple carriers without Board authorization, and that according to the facts it disclosed, Berkshire failed to comply with the requirements of § 11323 when it acquired BNSF, and when it first obtained control over both the CBEC and WCTU.
By letter dated September 25, 2012,
On September 28, 2011, the Board opened this proceeding to address the May 2, 2011 petition of the Western Coal Traffic League (WCTL), where WCTL asked the Board to issue an order declaring that the Board will adjust the Uniform Railroad Costing System (URCS) costs of BNSF for calendar year 2010 and subsequent years. In particular, WCTL asked the Board to declare that it will exclude the write-up in BNSF's net investment base attributable to the difference between the BNSF's book value and the price that Berkshire paid to acquire BNSF in 2010, and to make corresponding changes in BNSF's annual URCS depreciation calculations. WCTL argued that the inclusion of the write-up could have an impact in rate cases, the determination of BNSF's revenue adequacy, and other matters. On March 22, 2012, the Board held a public hearing to explore the arguments raised by WCTL, BNSF, and other parties to the proceeding.
The Board now seeks comments from the public on the effect, if any, of Berkshire's non-compliance with § 11323 upon this proceeding. Berkshire's 2010 acquisition of BNSF was and remains subject to the Board's jurisdiction pursuant to § 11323, but Berkshire will not come into compliance until December 31, 2012 (by its estimates). The Board seeks comments on the effect, if any, of Berkshire's non-compliance with § 11323 on the legal and accounting principles that govern acquisition premiums within rail mergers, here the post-February 2010 valuation of BNSF's asset base.
This action will not significantly affect either the quality of the human environment or the conservation of energy resources.
1. Comments are due by November 8, 2012.
2. Replies are due by November 28, 2012.
3. This decision is effective on its service date.
By the Board, Rachel D. Campbell, Director, Office of Proceedings.