RAILROADS: The Board Discontinues the Rail Fuel Surcharges Proceeding and Denies a Petition for Reconsideration

In August, the Board issued a decision discontinuing the Rail Fuel Surcharges (Safe Harbor) proceeding, in which the Board had sought comment on whether to modify or remove the “safe harbor” provision of its current fuel surcharge rules.  Ex Parte 661 (Sub-No. 2) (STB served Aug. 29, 2019).  This proceeding began in May 2014, when the Board issued an advanced notice of proposed rulemaking (ANPRM) to better understand “whether the sort of growing spread between” safe harbor HDF Index-based costs and actual costs seen in Cargill, Inc. v. BNSF Ry., NOR 42120, (STB served Aug. 12, 2013), “was unique to BNSF during a period of particularly high price volatility (or instead a widespread phenomenon in the rail industry).”  Id., slip op. at 2.  The ANPRM was also issued to “determine whether to modify or remove the safe harbor provision.”  Id.  The Board stated that the comments and replies received in response to the ANPRM were “varied,” and many did not directly address the issue raised.  Id.  The Board explained that, since the comment period, it has been unable to reach a majority decision on what action to take in response to the comments received.  Id., slip op. at 3.  Therefore, “the Board Members agree that this docket should be discontinued.”  Id. 

 

            In September, certain shipper groups filed a petition for reconsideration of the Board’s August 29, 2019 decision, arguing various material errors.  See Rail Fuel Surcharges (Safe Harbor), Ex Part 661 (Sub-No. 2), slip op. at 1 (STB served Dec. 30, 2019).  The Board denied the petition, finding that the shipper groups failed to address the Board’s rationale, which is required to demonstrate material error.  Id., slip op. at 2.  The Board further reasoned that its decision to discontinue the proceeding due to the lack of majority opinion and in the interest of administrative finality was well within the Board’s discretion.  Id.

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