(The Associated Press circulated the following article by James MacPherson on March 9.)
BISMARCK, N.D. — Basin Electric Power Cooperative’s criticisms this week of inadequate coal delivery by BNSF Railway to a Wyoming power plant are only the latest development in a disagreement between the power co-op and the railroad.
Basin has accused BNSF of “great plains robbery” by charging too much for coal shipping, saying electricity consumers are the ultimate victims.
The Fort Worth, Texas-based railroad denies the claim. “Our rates are reasonable,” BNSF spokesman Patrick Hiatte said in a statement.
The Bismarck-based electric co-op says the railroad is a monopoly that charges too much to provide substandard service hauling coal to the Laramie River Station power plant near Wheatland.
Basin furthered the squabble in a cartoon in one of its publications, showing an armed robber running from a bank building of “freight customers” to a train labeled “BN$F.”
“Obviously, we feel pretty passionate about this issue,” said Mike Eggl, Basin Electric vice president of government relations.
Hiatte said BNSF is addressing Basin’s “false allegations” with the federal Surface Transportation Board, which is reviewing the railroad’s rates.
Basin has been at odds with BNSF over rail service since a 20-year contract to ship coal to Laramie River Station expired in 2004.
Basin claims that its costs for shipping coal to Laramie River Station have doubled, and that will cost utility customers in nine states an additional $1 billion over the next 20 years.
The plant produces power for about 2 million consumers in North Dakota, South Dakota, Colorado, Iowa, Minnesota, Montana, Nebraska, New Mexico and Wyoming.
This week, Basin said an unrelated coal car shortage could cause a cut in power production at the plant.
Eggl said the 1,650-megawatt, three-unit Laramie River Station requires about 1.5 coal trains per day, which BNSF is supposed to deliver.
“The deliveries have been very sporadic,” Eggl said.
Basin said it has less than a week’s supply of coal stockpiled as a backup in case of an interruption in rail deliveries. “We are very concerned that we will have to go into curtailment if the stockpiles continue receding,” Eggl said.
Hiatte said the railroad added an extra train for the power plant in February to supplement Basin’s three trains.
Basin officials said it’s not enough. Ron Harper, Basin’s chief executive, said the Laramie River Station is a “captive” customer to the railroad, the only one serving the plant.
Basin and Western Fuels Association Inc., a Denver-based nonprofit that provides coal to the Wyoming plant, filed a complaint with the Surface Transportation Board in October 2004, after BNSF doubled the shipping rates.
Basin and Western Fuels want the panel to reject the rate increase and require the railroad to make a reimbursement — plus interest — for the additional costs. The case is pending.
“They absolutely have a monopoly over our operation,” Eggl said. “There was no alternative for us.”
Eggl said Basin has spent at least $5 million in legal fees in the case “with no definite end in sight.”
Basin has produced more than 700,000 pages of evidence, including a document that requires the company to construct a fictitious railroad to prove the BNSF’s costs are excessive, Eggl said.
He said Basin also supports legislation before Congress that would set more reasonable rail rates in the absence of competition.
“This is a political situation, and we’re seeking remedies through legislation,” Eggl said. “We feel strongly that the rail policy in this country needs to be revisited.”
The rates charged by BNSF are kept secret by the railroad and the companies, but Duane Richards, Western Fuels’ chief executive, said he thinks they are out of line.
“They are operating under what I consider to be a nonregulated monopoly,” he said.
He also said BNSF “is not meeting all deliveries,” even by adding an extra train.
“The bleeding has not stopped,” he said.
Hiatte, of BNSF, said the coal car delivery issues raised by Basin are not related to the case before the Surface Transportation Board.
Basin’s business is only a fraction of the coal trains hauled by BNSF in the Powder River Basin. Hiatte said the railroad averaged 44 coal trains a day in December, the latest figures available.