(The Associated Press circulated the following article on April 12.)
LITTLE ROCK, Ark. — Entergy Arkansas, the state’s largest provider of electricity – and consumer of coal – claims Union Pacific Railroad schemed to hold back deliveries of Wyoming coal to Arkansas power plants in an effort to make more money.
In a lawsuit filed Tuesday in Pulaski County Circuit Court, Entergy claimed that the railroad “in a conscious and deliberate practice” limited supplies of coal from the Powder River Basin in Wyoming in an effort to manipulate demand and ultimately maximize its profits.
Mark Davis, a spokesman for the railroad based at Omaha, Neb., said company lawyers were still reviewing Entergy’s filing Tuesday, and the company had no immediate comment.
The suit comes as power utilities across the United States continue to experience coal shortages and double-track owned by UP and BNSF Railway coming out of the Powder River Basin remains heavily congested.
Utilities and railroads have been engaged in a battle over railroad pricing and captive shipping rates in Washington, D.C., where bills sit on both the House and Senate sides.
Entergy Arkansas, part of the multi-state system of New Orleans-based Entergy Corp., said in the suit that it suffered “tens of millions of dollars” in damages when coal shipments declined up to 20 percent last year. The company said the coal shortage forced it to reduce operations at two large coal-fired power plants in Arkansas, the White Bluff plant near Redfield, and the Newark plant in Independence County.
The electric utility said the production cutbacks at its two major coal-fired plants forced it to increase purchases on the open market, at greater cost.
Union Pacific says bad conditions – including a snowstorm and two derailments last May – warped rail lines near the region where the coal shipments originate. Union Pacific ships more than 80 percent of the coal used at the White Bluff and Newark power plants.
The coal dispute is a factor in a state Public Service Commission investigation of a recent electricity rate increase by Entergy’s, and another increase planned for April that was suspended.
Entergy’s suit discounts Union Pacific’s effort to blame unexpectedly bad weather for part of the coal-transport problem.
The utility said federal regulations require the railroad to maintain its lines to assure continued service.