STB awards utility $30 million in case against UP

The U.S. Surface Transportation Board issued a decision granting an estimated $30 million in rate reductions and reparations in the maximum railroad-rate case brought before the STB by the Kansas City Power & Light Co. against the Union Pacific Railroad Co.

At issue in the case was KCP&L's challenge to rates charged by UP for the rail transportation of coal from Wyoming's Powder River Basin to KCP&L's Montrose Generating Station near Ladue, Mo.

The parties stipulated that the maximum lawful rate should be set at 180 percent of the variable cost of providing service, and in its decision, and STB found UP's rates for the challenged movements all exceed 180 percent.

The STB ordered UP to establish and maintain rates not to exceed 180 percent of the variable cost of providing the service at issue through the end of calendar year 2015. It also told UP to pay reparations to KCP&L, plus interest, for funds previously collected for rates charged above the 180 percent of variable-cost level. 

Source: American Shipper