LAW JUDGE TO DECIDE COAL RAIL RATE CASE SOME MEMBERS OF ICC CRITICAL

LAW JUDGE TO DECIDE COAL RAIL RATE CASE SOME MEMBERS OF ICC CRITICAL

The Interstate Commerce Commission has referred a controversial 10-year-old coal rate case back to an administrative law judge to determine if the agency should take another look at the evidence.

Some ICC members questioned the move, however, on grounds the case had dragged on long enough and that regulatory euthanasia may be a more appropriate move.Specifically, the commission voted to have the law judge determine if the shippers can submit additional cost and revenue evidence in an attempt to show that the rates on the involved traffic are too high.

The dispute involves rates on coal moving via the CSX Transportation and Norfolk Southern rail systems from points in Pennsylvania, Ohio, Kentucky, Virginia and West Virginia to three Atlantic ports for export.

The complaint was originally filed in March 1981 by Coal Trading Corp., a broker, and three shippers, the Pittston Co., Westmoreland Coal Sales and Mapco Inc.

After five years of lying fallow in the ICC's regulatory vineyards while the courts determined if the agency has jurisdiction over the rates, the case has grown ever since.

Over 140 volumes of evidence in the case are on file, ICC Commissioner Edward M. Emmett said, and the parties involved have problems indicating what is available to be looked at.

CSX and Norfolk Southern were making unreasonable profits on the coal traffic, the four companies contended, and submitted cost data to justify their case.

An ICC administrative law judge agreed and ordered the carriers to refund $200 million in overcharges to the shippers. This was later reduced by the

commission to $40 million.

The administrative law judge will determine whether the shippers should be permitted to submit additional cost data to plug into the stand alone cost model used as the basis for its argument that the freight rates are too high.

One issue that must be dealt with is whether the shippers should be permitted to use 1979-1986 cost data to update the stand alone cost model or use an index to update 1980 costs.

It makes more sense contended Karen B. Phillips, ICC vice chairman, to

deny all the pending petitions in the case and bring the decade-old proceeding to a close.

Stand Alone Cost analyses are very sophisticated, she argued, and it makes little sense to have the proceeding continue while attempts are made to come up with an incrementally improved model.

Allowing the shippers to reopen this segment of the case may set the stage for the railroads to seek reopening of the agency's decision that the carriers have market dominance over the traffic.

There also was nothing in earlier ICC decisions indicating that a move to change the Stand Alone Cost model would be permitted, Ms. Phillips said.