[Federal Register Volume 77, Number 199 (Monday, October 15, 2012)]
[Notices]
[Pages 62601-62602]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-25275]
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DEPARTMENT OF TRANSPORTATION
Surface Transportation Board
[Docket Nos. NOR 38302S and NOR 38376S]
United States Department of Energy and United States Department
of Defense v. Baltimore & Ohio Railroad Company, et al. and Aberdeen &
Rockfish Railroad Company, et al.
AGENCY: Surface Transportation Board, DOT.
ACTION: Notice of Proposed Settlement Agreement, Issuance of Procedural
Schedule.
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SUMMARY: On September 4, 2012, United States Department of Energy and
the United States Department of Defense (the Government) and BNSF
Railway Company (BNSF) (collectively Movants), filed a motion
requesting approval of an agreement that would settle these rate
reasonableness disputes as between them only. The Board is adopting a
procedural schedule for filing comments and replies addressing their
proposed settlement agreement. (As detailed below, these proceedings
involve disputes among a number of different entities, including other
railroad carriers besides BNSF. This settlement applies only to the
parties submitting the instant agreement and does not resolve these
proceedings in their entirety.)
DATES: Comments are due by November 29, 2012. Reply comments are due by
December 31, 2012.
ADDRESSES: Comments and replies may be submitted either via the Board's
e-filing format or in the traditional paper format. Any person using e-
filing should attach a document and otherwise comply with the
instructions at the E-FILING link on the Board's Web site, at http://www.stb.dot.gov. Any person submitting a filing in the traditional
paper format should send an original and 10 copies to: Surface
Transportation Board, Attn: Docket No. NOR 38302S, et al., 395 E Street
SW., Washington, DC 20423-0001. Copies of written comments and replies
will be available for viewing and self-copying at the Board's Public
Docket Room, Room 131, and will be posted to the Board's Web site. In
addition, send one copy of comments to each of the following: (1)
Stephen C. Skubel, Room 6H087, U.S. Department of Energy, 1000
Independence Ave. SW., Washington, DC 20585; (2) Terrance A. Spann,
U.S. Department of Defense, 9275 Gunston Road, Suite 1300, Fort
Belvoir, VA 22060; and (3) Jill K. Mulligan, BNSF Railway Company, 2500
Lou Menk Drive, AOB-3, Fort Worth, TX 76131.
FOR FURTHER INFORMATION CONTACT: Marc Lerner, (202) 245-0390.
[Assistance for the hearing impaired is available through the Federal
Information Relay Service (FIRS) at: 1-800-877-8339.]
SUPPLEMENTARY INFORMATION: 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. See Commonwealth Edison Co. v. Aberdeen &
Rockfish R.R., 2 I.C.C.2d 642 (1986). The United States Court of
Appeals for the D.C. Circuit set aside and remanded the decision. See
Union Pacific R.R. v. ICC, 867 F.2d 646 (D.C. Cir. 1989). On remand,
the ICC ruled that the movement of these radioactive materials for
reprocessing was subject to the rate cap on recyclables set out in
former 49 U.S.C. 10731(e) and directed the parties to file revenue-to-
variable cost (R/VC) evidence to resolve the remaining reparations and
rate prescription issues. See United States Department of Energy v.
Baltimore & Ohio R.R., 10 I.C.C.2d 112 (1994). While judicial review
was pending, Congress enacted the ICC Termination Act of 1995, Public
Law 104-88, 109 Stat. 803, which repealed Sec. 10731 in its entirety
and directed that all proceedings pending under the repealed section be
terminated.
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
[[Page 62602]]
(except that UP remained obligated to respond to the Board's subpoena
authority); (4) continued to hold these proceedings in abeyance; and
(5) directed the Government to file quarterly reports on the progress
of future settlement negotiations with the remaining 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 Trainload Rates on
Radioactive Materials, E. Railroads, 362 I.C.C. 756 (1980) and 364
I.C.C. 981 (1981) (Eastern Prescription); \1\
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\1\ Maximum R/VC ratios were prescribed on a commodity-by-
commodity basis at various minimum weights as local and proportional
rate factors. The prescription was applicable within the East, but
primarily was to be used for through movements destined beyond the
lines of the rail carriers covered by the prescription. The ICC's
1980 decision, 362 I.C.C. 756, was affirmed in Consolidated Rail
Corp. v. ICC, 646 F.2d 642 (D.C. Cir. 1981), cert. denied, 454 U.S.
1047 (1981).
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(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 Eastern
Prescription; and
(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 Federal
Register and adopt a procedural schedule for the filing of comments and
replies.
The Board is granting Movants' request in part. Notice of their
motion and the proposed BNSF Agreement is being published in the
Federal Register and a procedural schedule is being adopted for the
filing of comments and replies responsive to Movant's remaining
requests.
Decided: October 10, 2012.
By the Board, Rachel D. Campbell, Director, Office of
Proceedings.
Jeffrey Herzig,
Clearance Clerk.
[FR Doc. 2012-25275 Filed 10-12-12; 8:45 am]
BILLING CODE 4915-01-P