Captive shipping is serious concern

BNSF Railway got a break recently when the federal Surface Transportation Board rejected Basin Electric Power Cooperative's claims that the railroad is a monopoly that charges too much.

The railroad insists that its shipping rates are fair and appropriate, but there are a lot of people beyond the North Dakota co-op who just don't see it that way, including Montana Gov. Brian Schweitzer.

Basin Electric is based in Bismarck, N.D., so its rate case may seem to be a dispute that's far removed from Montana. But it's not.

Not only does Basin Electric have thousands of Montana customers, but it is not alone in its dispute with the railroad over "captive shipping" rates. Montana is considered 95 percent captive in terms of rail transportation, because BNSF Railway simply has no competition, other than a Union Pacific spur line to Butte. It's a situation that affects not only coal hauling rates, but all other sectors that rely on rail transportation, including forest and agriculture products.

The Schweitzer administration considers the Basin Electric case to be symptomatic of a larger problem - a problem with the Surface Transportation Board possibly more so than BNSF Railway.

At Schweitzer's request, the state Legislature this year appropriated $3 million for the governor to take legal action aimed at addressing the state's captive shipping problem. And that legal action could be aimed directly at the Surface Transportation Board, a panel that increasingly appears to be geared toward protecting rail transportation monopolies rather than other economic sectors that heavily rely on rail transport.

At another time in its history, the STB's mission did indeed have a role in ensuring the viability and survival of railroad companies. But in recent years, BNSF and other railroads have been incredibly profitable. Yet the Surface Transportation Board finds that Basin Electric "failed to establish that the challenged rates are unreasonably high," even though the co-op thought it was important enough to spend $5 million in developing a case that involves more than 700,000 pages of evidence.

Why would the Schweitzer administration think there might be a problem with the Surface Transportation Board itself? For one thing, the board is often comprised of people who are directly associated with the transportation industry. The immediate past chairman of the board, for example, was hired as executive vice president for BNSF Railway soon after his term on the board ended.

We're not sure about the technical, legal feasibility of challenging a panel that is an arm of the federal government, but Schweitzer should shine a light on the Surface Transportation Board and the way it responds to captive shipping claims.

Basin Electric may have lost its case. But the captive shipping issue is a fight that's far from over for Montana.