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Rail Service in Wisconsin
History of Railroads -
Between 1970 and 1980, Congress passed major pieces of legislation to prevent any further decline of the railroad
industry. These new laws initiated a large-scale consolidation of railroad operations. Since this legislation, more
The lack of competition has led to several issues that affect the utility and agricultural industries. Today, the Surface Transportation Board (STB) has the authority to set maximum rates and take action if a railroad is found to have market dominance. The STB is a regulatory agency that Congress charged with resolving railroad rates and service disputes. No State agency has jurisdiction over railroad rates and service because the federal government has preempted state regulation of rates and service. Several groups have investigated the impacts of rising railroad shipping costs. Many have questioned the consolidation in past years and whether this lack of competition among the railroad companies has an impact on rising shipment costs and unreliable shipping service. Public Hearings in 2006 Three hearings were held around the state. Written testimony and other information from the hearings were reviewed by interested parties and were included as part of the PSC’s investigation of fuel costs and the effects of the rail industry. DATCP and PSC Voice Support for Federal Rail Energy Transportation Advisory Committee
In September 2007, Badger-Cure, a coalition of utilities, agriculture and manufacturing industries and others interested in freight rail shipping service rates, hosted a forum with STB Chair Charles Nottingham. At this forum, the PSC and DATCP called for major reform of the nation’s railroad system, citing the lack of reliable and affordable rail service as a threat to economic growth and stability in the state and nation’s agriculture and energy sectors.
Railroad business has dropped substantially. In the past year (year ending June 30, 2009), railroad fuel surcharges have dropped substantially (as much as 70%). Coal shipments were also down around 20%. “Coal volumes were at their lowest quarterly levels in nine years." Carloads originated on U.S. railroads in June 2009 were down 19.5% to 252,078 carloads from 1,037,928 carloads
in June 2008. The STB has penalized at least two railroads for overcharging utilities Union Pacific Railroad will have to grant rate relief and pay reparations to a captive Oklahoma utility, in amounts the Surface Transportation Board said could reach $100 million over 10 years, as the STB settled a dispute over how to calculate charges on those UP coal hauls. In a high-profile complaint with the largest award to a captive rail shipper, the STB ordered an estimated $345 million in reparations and rate reductions to Western Fuels Association, Inc. and Basin Electric Power Cooperative, Inc. from Burlington Northern Santa Fe Railways (BNSF). The agency ruled that that the railroad charged unreasonable rates to haul 8 million tons of coal each year from mines in Wyoming’s Powder River Basin to Moba Junction, Wyoming. The STB found the transportation rates BNSF charged Western Fuels Association, Inc. and Basin Electric Power Cooperative, Inc. to be roughly six times more than the variable cost of providing that service. After the STB’s stand-alone cost test demonstrated that in 2009 the maximum lawful rate for this traffic cannot exceed a revenue-to-variable cost ratio of 240 percent, the STB ordered BNSF to lower its transportation rates by approximately 60 percent and capped the rates through 2024. The Rail Energy Transportation Advisory Committee
(RETAC) was established by the Surface Transportation Board in July 2007. RETAC provides advice and guidance
RETAC is comprised of 23 voting members, representing a balance of stakeholders with an interest in energy transportation by rail, including large and small railroads, coal producers, electric utilities, the biofuels industry, and the private railcar industry. The three members of the Board serve as ex officio members of RETAC, along with representatives of the Departments of Agriculture, Energy, Transportation, and the Federal Energy Regulatory Commission. Meetings, which are open to the public, are held at least twice a year. For more information about RETAC, contact Scott Zimmerman by phone at (202) 245-0202 or by e-mail at Scott Zimmerman. For more information about the PSC and DATCP’s efforts to investigate the railroad industry, please contact the following: Department of Agriculture, Trade and Consumer Protection Public Service Commission of Wisconsin |
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than 40 mergers and consolidations have decreased the number of Class 1 railroads from over 40 to just seven.
Now, four of these railroads control more than 94 percent of the industry’s revenue and own over 90 percent
of the country’s track miles. 
to the Board and serves as a forum for discussion of emerging issues, regarding the transportation by rail of
energy resources including, but not necessarily limited to coal, ethanol, and other biofuels.