Coal shippers have won an important victory against the railroads.
Photo credit: Index Stock Imagery

By Steven Johnson | ECT Staff Writer | Published in ECT.coop: March 4, 2011

Federal regulators handed an important victory to coal shippers, rejecting an attempt by railroads to hold them accountable for tens of millions of dollars in coal dust cleanup costs.

By a 3-0 vote, the Surface Transportation Board on March 3 sided with Arkansas Electric Co-op Corp., saying a tariff that BNSF Railway Co. planned to impose on the G&T in 2009 was unreasonable and riddled with questions about appropriate ways to monitor coal dust emissions.

“While the goal of minimizing the release of coal dust during rail transport is a reasonable objective for railroads and coal shippers to pursue, the challenged tariff in this case simply creates too much uncertainty to be deemed a reasonable practice,” the board said in a 16-page ruling.

Steve Sharp, principal engineer, civil and fuels for AECC, said the Little Rock, Ark.-based G&T was pleased by the decision. “We feel it was important to hold the railroads accountable and prevent them from passing on maintenance costs to customers who already pay for maintenance through their contracts,” he said.

AECC filed an initial complaint against BNSF in October 2009, and later was joined by NRECA and other trade associations. Shippers said that the BNSF plan could have cost $100 million a year that would likely be passed on to co-op members and ratepayers.

The STB acknowledged that coal residue buildup in track beds presents a legitimate maintenance issue for freight railroads, and said carriers can establish reasonable requirements to minimize spillage from railcars.

However, the panel held that provisions of BNSF’s tariff were so vague that shippers could violate them, and face fines or sanctions, even if they followed the railroad’s specific directives on how to load cars and how to treat cargo with a chemical to control coal dust dispersal.

“A coal dust emission requirement that a shipper may be unable to meet, even if the currently accepted methods of coal dust suppression are employed, is problematic,” the board said.

It also agreed with shippers that BNSF’s proposed system to monitor coal dust emissions was flawed and could produce inaccurate readings. And in one case, the board noted, BNSF refused to provide emissions data to Ameren, preventing the Midwest-based IOU from determining whether its coal dust suppression methods were working.

The board said it hopes shippers and railroads will agree on solutions to the problem, in lieu of a government-sanctioned approach to coal dust emissions.