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Southern Minnesota Municipal Power Agency (SMMPA) supplies wholesale power to 18 <br />member municipal utilities in Minnesota. It is a 41 % co-owner of Sherco 3, an 884MW <br />coal-fired power plant near Becker, Minnesota. SMMPA buys coal from the Absaloka <br />mine in Montana through Western Fuels Association. That coal is delivered by the <br />BNSF to the Sherco 3 site. BNSF is the only railroad that serves Sherco 3. Through <br />Western Fuels, SMMPA is working to address captive rail shipper issues prior to <br />expiration of its current contract in 2007. <br />Individual municipal utilities have experienced similar problems with coal shipments to <br />their local plants. Hibbing Public Utility and Virginia Public Utilities have resorted to <br />trucking coal from Superior, Wisconsin to their respective cities to fuel their 35 MW <br />plants rather than deal with the prohibitive cost of rail transport. <br />During the 108th Congress, legislation introduced in both houses (S. 919 in the Senate, <br />H.R. 2924 in the House), would have encouraged structural and policy changes to <br />promote competitive transportation alternatives for captive shippers and improvements in <br />customer protection to be implemented by the STB. Major components of the legislation <br />include: <br />1. Clarification of the objectives of the STB. <br />2. Requirements that railroads must quote rates between any two points on their <br />system where freight can originate, terminate, or be transferred. <br />3. Arbitration of rate, service and other disputes. <br />4. Removal of "paper bamers" in sales or leases of rail line to short line or regional <br />railroads. <br />5. Institute "public interest test" rather than "anti-competitive conduct" test in <br />terminal and switching agreements. <br />6. Tri-Annual DOT study of rail-to-rail competition. <br />7. States may petition the STB to declare part or all of a state as an area of <br />"inadequate rail competition" -triggering customer remedies. <br />8. Establish a Rail Customer Advocacy Office at the Department of Agriculture. <br />This bill was supported in the last Congress by a consortium of rail consumers including <br />the American Public Power Association, National Rural Electric Cooperative <br />Association, Edison Electric Institute, Western Coal Traffic League, American Chemistry <br />Council, National Industrial Transportation League, National Association of Wheat <br />Growers, The Fertilizer Institute, American Plastics Council, Paper & Forestry Industry <br />Transportation Committee, National Barley Growers Association, Glass Producers <br />Transportation Council, Portland Cement Association, and others. The legislation should <br />be reintroduced in the current Congress and passed into law. <br />Minnesota Municipal Utilities Association <br />February 2005 <br />