Michigan Utility Wins Rate Case Against CSX

A Michigan utility company has won a rate case against CSX before the U.S. Surface Transportation Board.

The STB recently sided with Consumers Energy of Jackson, Michigan, against CSX in a case filed in January 2015 that challenged the rates CSX charged to haul coal to the utility’s J.H. Campbell generating plant near West Olive, Michigan.

CSX picked up the Powder River Basin coal from BNSF in Chicago and hauled it 235 route miles to the power plant. The STB agreed with the utility company and set a lower rate.

However, CSX has asked the Board to extend the proceeding to Feb. 20 during which time it will decide whether to ask the board to reconsider its ruling.

Trains magazine cited an unidentified attorney who was said to be familiar with the case as saying that it has become rare in recent years for shippers to win rate challenge disputes.

The attorney said most rate cases have involved chemical companies, but the volumes of cars in question and the varied distribution of chemical products makes it difficult for the STB to determine if the rates charged by the railroads are reasonable.

In the Consumer Energy case, the STB said that CSX was the “dominant” carrier in the market and the utility was a captive shipper.

The STB staff used the “stand-alone cost” method to determine if CSX’s revenue unfairly exceeded the cost of hauling the coal.

In response, CSX argued that Consumers Energy had an alternative to rail, including by water because the generating plant was close to the shore of Lake Michigan.

CSX said that a nearby generating plant operated by Consumers Energy on the lake receives coal by boat.

In rejecting the CSX arguments, the STB determined that the railroad had an unusually high revenue-to-variable cost ratio because of the costs of moving coal through the Chicago gateway and maintaining the rail line along the eastern shore of Lake Michigan.

Detroit-Holland Rail Ridership Study Coming

Authorization for the Michigan Department of Transportation to study reinstituting passenger rail service between Detroit and Holland, Mich., via Lansing and Grand Rapids, was part of the fiscal year 2015 budget approved by Gov. Rick Synder.

The study of potential ridership along the route is expected to be conducted later this year.

A grant application has been filed with the Service Development and New Technology program for $100,000 to fund the study. The program is a federal grant program facilitated by MDOT.

The grant is expected to be awarded in August with the study taking six months to complete.

The authorization for the study mandates that the results be reported to the Michigan state legislature by May 2015.

The ridership study will be limited in scope. An alternative analysis and environmental impact study will need to be conducted if the ridership study finds that demand supports the re-establishment of a passenger rail line between Detroit and Holland.

The cost of an alternative analysis and environmental impact study is expected to be between $700,000 to $1 million, according to Dan Sommerville, a policy associate with the Michigan Environmental Council and member of the Michigan By Rail team.

“(The ridership study) is a much lower-cost study, but it’s going to give us the main piece of whether or not to proceed with the rest of the planning process,” he said.

Sommerville said ridership demand would be determined by looking at a such things as traffic patterns along Interstate 96, which runs parallel to the former Pere Marequette route that would be used.

The ridership study will also examine population densities, employment concentration, and people’s origin and destination patterns along the corridor.

“We’ve got a number of statistics and data that shows the ridership demand is there, but essentially what this study does is looks at the ridership demand — what is the real demand for passenger rail service in this corridor,” Sommerville said.

He said a 2002 study only examined the Lansing to Detroit segment of the corridor.

“Since 2002, when that last report came out from Detroit to Lansing, there has been a 78 percent increase in rail ridership just here in Michigan,” he said.

The location of colleges and universities is another factor expected to support ridership demand in the Detroit-Holland corridor.

Sommerville said more than a dozen colleges and universities sit within walking distance of corridor rail stations.

“U of M put out a study that looked at what are the different kinds of riders that we have here in Michigan,” he said. “They broke down who was riding the train, and found that more than 20 percent of Michigan riders are students. That is a considerable source of demand right there.”

Sommerville noted that Michigan is trying to attract young workers, and studies have shown that young workers want a variety of public transportation options.

He said passenger rail is one of the pieces of infrastructure that Michigan needs to invest in to keep young workers from leaving the state.

Economic impact is another factor in favor of passenger rail service.

Sommerville said Grand Valley State University conducted a study in 2009 looking at the annual community benefit of having a rail station in a city. The study found $62 million in annual community benefits that are attributable to having a train station in town.

The study looked at the cost savings to passengers of taking rail over driving or flying, the spending of a rail passenger on retail, restaurants and hotels, and Amtrak’s annual investment in Michigan.

“Amtrak, in 2013, invested over $31 million in goods and services from Michigan companies,” Sommerville said. “That is a sizeable amount of investment that is coming from having rail service in Michigan.”

No cost estimates have been made for bringing the ex-Pere Marequette line – now owned by CSX – up to passenger train utility.

“Upgrading tracks to run trains at a higher speed is much less costly than getting new land and laying new tracks,” Sommerville said. “Essentially, the cost we are looking at here is upgrading the current rails and procuring new train cars.”

Until the May 1, 1971, inception of Amtrak, the Chesapeake & Ohio operated four trains a day between Detroit and Holland.

After Amtrak began, the only intercity rail service in Michigan linked Chicago and Detroit. That route has since been extended to Pontiac.

Michigan funds Amtrak service between Chicago and Grand Rapids, and between Chicago and Port Huron.

Blue(frozen)water Michigan

Ice covers the hand brake of a Pere Marquette caboose at the Steam Railroading Institute in Owosso, Mich., on Sunday (Dec. 22). Much of central Michigan experienced an overnight ice storm that took down trees and left thousands without power.

A friend and I ventured to icy Michigan on Sunday, Dec. 22, to photograph the Pere Marquette 1225 pulling two North Pole Express trains.

The morning trip was canceled due to the weather so we hung out in Durand to catch some Canadian National action.

The afternoon 1225 trip operated as scheduled once the track has been inspected and cleared of any obstacles.

Shown here are some of the images that I made during our downtime waiting for the PM 1225 to run.

Photographs by Craig Sanders

Train No. 149 rolls into Durand with a load of containers.

No. 149 shows signs of having battled the winter elements for many miles.

The track diverging to the left is the connection from the Chicago-Port Huron mainline to the Holly Sub to Detroit.

Snow showers had developed by the time that No. 348 reached Durand headed eastward.

Most of the consist of No. 348 was auto racks with a few odd ball freight cars thrown in.

Ice covered street signs in Owosso.

The code lines along the former Pere Marquette route between Detroit and Grand Rapids have a liberal coating of ice. This line is now owned by CSX, which is seeking regulatory approval to decommission the block signals on this route.

CSX To Remove Signals from 2nd Michigan Line

Another CSX route in Michigan is slated to lose its block signals. CSX has notified the Federal Railroad Administration about its plans to deactivate the signals on its Plymouth Subdivision in central Michigan.

The 120-mile ex-Pere Marquette operates between Grand Rapids and Plymouth.

The plan has CSX removing 51 dispatcher-controlled signals and 58 automatic signals. The railroads plans to convert 11 power-operated switches to hand throw operation and to install new approach signals at MP 29.0, MP 53.8, MP 50.9, MP 86.5, MP 83.6, and MP 147.4.

Dispatchers will continue to control signals at Annpere (MP 52.87) and at Trowbridge (MP 84.9) in East Lansing. Annpere is a crossing with the Lake State Railway while Trowbridge is a crossing with Canadian National.

CSX said in its filing that the signal system “is no longer needed for present-day operations.” CSX plans to operate the route with track warrant control, which already exists over 30 miles between Lansing and Lake Odessa.

Canadian Pacific trains once traversed this route on trackage rights trains between Chicago and Detroit. Most of these CP trains now use a Norfolk Southern routing via Elkhart, Ind., and the last operated via CSX in 2010.

CSX Wants to Remove Signals from Michigan Line

CSX is seeking regulatory approval to remove block signals and remote control switches on 55 miles of its Saginaw Subdivision in eastern Michigan.

In a filing with the Federal Railroad Administration, CSX said it wants to remove 67 remote control block signals, 20 automatic block signals and convert 28 power operated switches to hand throw control.

The route is a former Pere Maquette line between Mount Morris (north of Flint) and Plymouth and would be operated by track warrants once the signals are deactivated.

CSX would retain two dispatcher-controlled interlocking plants at CP South Kearsley (mile post 33.54) and at CP Holly (MP 50.42), both of which are grade crossings with Canadian National tracks.

Approach signals would be installed at mileposts 27.9, 2.9, 35.0, 49.1, 51.5 and 74.9. CSX said in its petition that signals are “no longer needed for present-day operations.”

The line once saw extensive automotive and chemical traffic from Flint and Midland, but that has diminished. Lake States Railway has operated the line north of Mount Morris since 2005.