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Friday, December 19, 2008

Momentum builds to end railroad monopolies

From a media release issued by Rep. Tammy Baldwin and others in Congress:

Momentum is building to pass legislation repealing antiquated exemptions in federal statutes so that antitrust law fully covers railroads.

In a letter sent last week to House Speaker Nancy Pelosi, Minority Leader John Boehner, Judiciary Committee Chair John Conyers, Judiciary Ranking Member Lamar Smith, and Judiciary Antitrust Taskforce Ranking Member Ric Keller, the Section of Antitrust Law of the American Bar Association endorsed H.R. 1650, the Railroad Antitrust Enforcement Act of 2007, authored by Congresswoman Tammy Baldwin (D-WI).

In a 13 page analysis, the Section laid out its support for the bill, concluding that “The Section encourages Congress to move forward quickly to dismantle the antitrust exemption for the railroad industry, through the Railroad Antitrust Enforcement Act, and to consider additional legislation to eliminate antitrust exemptions applicable to other industries.”

Their letter follows closely on the heels of a letter that Reps. Baldwin and Conyers sent last month to Speaker Pelosi urging her to include H.R. 1650 as part of the economic stimulus package to be considered in January. Baldwin and Conyers reminded the Speaker that the legislation was reported in April by a voice vote of the Judiciary Committee without opposition and that companion legislation, S.772, authored by Sen. Herb Kohl (D-WI) was reported by the Senate Judiciary Committee, also by a voice vote without opposition.

In their letter to Pelosi, Baldwin and Conyers said, “As Congress continues to address the problems created in part by a lack of regulation and oversight in the largest financial institutions in America, we think the time is right to ensure antitrust compliance by our nation’s railroads. Their current unrestrained pricing power over America’s consumers is hurting our economy and our country, and must be addressed.”


The release cites Dairyland Power as an example of problems with prices and service:

For years, captive shippers have been reporting spiking rail rates and unreliable service. In Wisconsin, for example, Dairyland Power, a rural cooperative provides electricity for approximately 575,000 people in Wisconsin, Minnesota, Iowa, and Illinois. Dairyland’s three coal-fired power plants consume 3.2 million tons of coal per year, 75% of which comes by rail from the Powder River Basin in Wyoming. Over the years, Dairyland has reported deteriorating service quality; at times forcing them to cut back generation due to insufficient coal inventories. Adding further injury, at the end of 2005 the railroad that holds Dairyland captive raised its rates dramatically. Dairyland now pays about $75 million a year to ship $30 million worth of coal. Railroad rate increases have translated into a 15 to 20% increase in electricity rates for consumers.

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