Daily Rules, Proposed Rules, and Notices of the Federal Government
In March 1981, the Government filed these complaints against 21 major railroads (the Railroad Defendants) under section 229 of the Staggers Rail Act of 1980, Public Law 96-448, 94 Stat. 1895. The Government sought reparations and a rate prescription relating to the nationwide movement of spent nuclear fuel, other high level radioactive wastes, and the empty containers (casks) and buffer and escort cars used for their movement (radioactive materials). In 1986, the Board's predecessor, the Interstate Commerce Commission (ICC), found that the Railroad Defendants were engaging in an unreasonable practice, imposing substantial and unwarranted cost additives—above and beyond the regular train service rates—in an effort to avoid transporting these radioactive materials. The ICC canceled the existing rates and cost additives, prescribed new rates, and awarded reparations.
The Railroad Defendants petitioned the Board to dismiss the complaints in 1996, and, in 1997, they invited the Government to explore the possibility of settling the complaints. Discussions commenced on a nationwide settlement covering all of the Railroad Defendants that might carry radioactive materials. The Government subsequently chose to negotiate only with Union Pacific Railroad Company (UP), the destination carrier for most of the movements of radioactive materials that were to be covered by the nationwide settlement, after the parties concluded that there were potential antitrust problems in negotiating with the Railroad Defendants as a group. On September 15, 2004, the Government and UP filed a motion seeking approval under 49 U.S.C. 10704 of a settlement agreement (the UP Agreement) they had negotiated to resolve these complaints as between them only. The Board, in a decision served in these proceedings on August 2, 2005: (1) Approved the UP Agreement; (2) dismissed UP as a party to these proceedings; (3) relieved UP of any obligation to participate in these or related proceedings involving claims against connecting railroad defendants
Movants jointly request that the Board approve the proposed agreement they have negotiated (the BNSF Agreement) to settle these rate reasonableness complaints as between them only and that the requested approval be without prejudice to the Governments' complaints and other actions insofar as they apply to the remaining Railroad Defendants involved in these proceedings. The UP Agreement, according to Movants, served as a model for their Agreement.
The BNSF Agreement, which Movants describe as flexible, comprehensive, long-term, and system-wide:
(1) Provides for a term of 25 years commencing on the effective date of the Board's approval of the BNSF Agreement and continues in effect for additional 5-year periods, subject to a 1-year termination notice requirement;
(2) Applies broadly to the nationwide movement on BNSF's rail lines of irradiated spent fuel, parts, and constituents; spent fuel moving from foreign countries to the United States for disposal; empty casks; radioactive wastes; and buffer and escort cars. Excluded from the BNSF Agreement are local movements originating and terminating in the East, which are covered by the rate basis prescribed in
(3) Establishes that the movement of these commodities constitutes common carrier service; addresses the elements of service required of BNSF; adopts guidelines for safe handling and security; obligates BNSF to provide, as needed, “extra services” as described in the BNSF Agreement, at the rates agreed upon;
(4) Adopts a rate methodology to:
(a) apply to all future movements of these radioactive materials in common carrier service. The methodology adopts maximum R/VC markups (not to exceed to 1.80, 2.50, or 3.51 times the shipment cost, depending on commodity type) of BNSF's most current system-average variable unit costs computed under the Board's Uniform Rail Costing System. Movants state that the proposed rate methodology is consistent with, but broadens, the rate prescription adopted in
(b) compensate BNSF for “extra services” and dedicated train service, when requested by the Government, and procedures to calculate “equitable compensation” for emergency related costs that BNSF may incur.
(5) Adopts a procedure to update rates and “extra services” annually to reflect changes in BNSF's system-average unit costs;
(6) Extinguishes BNSF's liability (and that of its predecessors and subsidiaries) for reparations in all matters arising out of these proceedings; and
(7) Adopts Alternative Dispute Resolution procedures with final recourse to the Board and mechanisms to renegotiate portions of the BNSF Agreement in a limited number of circumstances or if changed circumstances make further adherence to the terms of the BNSF Agreement “grossly inequitable” to either party.
Movants request that the Board: (1) Prescribe the rate methodology and maximum R/VC ratios that have been agreed to for the radioactive materials and rail services that are the subject of the BNSF Agreement; (2) dismiss BNSF as a defendant in these proceedings, preserve the liability of connecting carriers for reparations as to their portion of the charges assessed on through routes that include(d) BNSF, and not require BNSF to participate in rate proceedings initiated by the Government against remaining Railroad Defendants (except that BNSF will remain obligated to respond to the Board's subpoena authority); (3) retain jurisdiction over these proceedings and continue to hold them in abeyance pending further settlement negotiations; and (4) publish notice of their motion and the proposed BNSF Agreement in the
The Board is granting Movants' request in part. Notice of their motion and the proposed BNSF Agreement is being published in the
By the Board, Rachel D. Campbell, Director, Office of Proceedings.