5.7. ERMUSR 03-13-2013 - Laserfiche WebLink

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"""u Minnesota Municipal Utilities Association • those customers without access to meaningful was about $8.1 Billion, or 35%, over book value, competitive transportation alternatives. Berkshire Hathaway is attempting to pass the acquisition costs on to rail customers. The STB is Local case studies now in the process of deciding whether to allow this There are a number of examples of the adverse pass-through by BNSF. Meanwhile, the additional impacts caused by the lack of railroad competition cost of the acquisition premium to MRES and its on joint action agencies and Minnesota municipal members amounts to approximately $430,000 per electric utilities. year. Missouri River Energy Services (MRES), a joint Southern Minnesota Municipal Power Agency action agency supplying wholesale power to 24 (SMMPA) is another joint action agency supplying municipal utilities in Minnesota, is a co-owner of wholesale power to 18 municipal utilities in the Laramie River Station (LRS), a coal-fired power Minnesota. The agency is a 41 percent co-owner plant near Wheatland, Wyoming. BNSF Railway of Sherco 3, an 884 MW coal-fired power plant Company (BNSF) currently transports some 8.3 near Becker, MN. Coal is delivered by BNSF, the million tons of coal per year approximately 175 only railroad that serves the plant. As a captive miles from coal mines in Wyoming's Powder River shipper, SMMPA has little or no leverage should Basin to LRS. After its contract for that service the railroad seek to take advantage of that position, expired in 2004, BNSF established new rates that making Federal oversight and action the sole more than tripled the prior rate and increased remedy. transportation costs to MRES by about $7 million per year, 400 percent higher than the direct costs Individual municipal utilities have experienced being charged to shippers in competitive markets. similar problems with coal shipments to their The coal supplier for LRS appealed to the STB, local plants. Hibbing and Virginia, two small and in February 2009 the Board issued a judgment communities located on Minnesota's Iron Range, providing $350 million in rate relief for coal enjoy the benefits of owning and operating their shipments to the plant through 2024. — — e BNSF appealed the ruling to the U.S. Court of Appeals for the D.C. Circuit, which sent the case back to the STB on a �I technicality. In June 2012 the STB responded by upholding its original decision, which BNSF appealed to the court again in August, 2012. Final comments are due in March of 11 this year. R In the midst of this prolonged - legal battle, BNSF sold °AEI lea the railroad to Berkshire ;" » t� " e (t 13 . y, i: Hathaway in 2010. Even , (r though the purchase price 10/ 2013 Federal Position Statements