(The following story by Gib Snyder appeared on The Observer website on June 23, 2010.)
DUNKIRK, N.Y. — The path has apparently been cleared for the resumption of coal shipments to the NRG Power Marketing LLC’s Dunkirk generating station.
An e-filing posted on the United States Surface Transportation Board’s website notified the STB that NRG and CSX Transportation, Inc. have “reached an agreement in principle to settle the above-captioned litigation.
“Consequently, NRG and CSXT jointly request that the Board impose a temporary one-week stay in this case, and refrain from issuing and decision on NRG’s pending Petition for Injunction until June 28, 2010.
“The requested stay will allow the parties time to comprise a formal settlement agreement.”
The e-filing was sent to Cynthia T. Brown, Chief, Section of Administration Office of Proceedings Surface Transportation Board and was signed by NRG attorney Karyn A. Booth of Thompson Hine, while G. Paul Moates of Sidley Austin LLP, signed for CSXT.
A proposed shipping rate hike by CSXT caused NRG to file the complaint under docket number NOR 42122. NRG contested the proposed $27 per ton charge for delivery to its Dunkirk plant and a $28 per ton charge for delivery to its Tonawanda Huntley plant. NRG stated in the complaint its Dunkirk operation uses some 2 million tons of coal annually while the Huntley station uses some 1.5 million tons of coal.
NRG also stated in its complaint that the CSXT common carrier rates exceeded 180 percent of its variable costs for the service in accordance with 49 U.S.C. 10707(d)(1). Under requested relief NRG had asked the STB to “prescribe maximum reasonable rates and service terms, and award reparations for a combined period of 10 years, beginning April 1, 2010.”
If the agreement is finalized, it will end a process which began in January 2009 when NRG requested contract rate proposals from CSXT and Union Pacific Railroad, which ships NRG’s coal from Wyoming’s Powder river Basin to the Chicago area where CSXT takes over. The latest joint contract expired March 31 and provided for UP and CSX to ship full cars east and empty ones back to Wyoming.
Negotiations between NRG and the two rail companies began in April 2009 with NRG and UP reaching an agreement in February that became effective April 1.
On March 11, NRG requested common carrier tariff rates from CSXT under AAR Accounting Rule 11 from Chicago to Dunkirk and Huntley. NRG subsequently challenged those rates in its complaint and among other items, stated that CSXT was the only rail carrier available and there was no effective competition for CSXT.
As expected, CSXT had contested most of NRG’s complaints in its filings. The final outcome of any agreement between the companies is still unknown.
While no coal train sightings at the Lake Shore Drive crossing into NRG’s Dunkirk plant have been reported since April 5, that situation may change in the near future.