News & Reviews News Wire Nebraska utility to challenge Union Pacific reciprocal switch rate

Nebraska utility to challenge Union Pacific reciprocal switch rate

By | May 6, 2022

At issue: Rate Union Pacific charges to move coal between BNSF Railway interchange and Omaha power plant

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A Union Pacific coal train rolls through Glen Ellyn, Ill., in October 2020. A Nebraska utility plans to challenge UP’s rate to handle coal deliveries in Omaha. (Trains: David Lassen)

WASHINGTON — A Nebraska utility says it will file a rate complaint against Union Pacific for a reciprocal switch involving unit coal trains interchanged with BNSF Railway a few miles from the power plant.

The Omaha Public Power District disclosed its plans to challenge the reasonableness of UP’s rates in a regulatory filing with the Surface Transportation Board this week.

BNSF originates the coal trains in the Powder River Basin of Wyoming and moves them to Gibson Yard in Omaha. UP handles the trains from the interchange eight miles or so to and from the North Omaha Power Station.

UP charges $295 per carload, according to its public tariff. UP makes exceptions to its reciprocal switching charge for shipments of 50 or more cars, on a single waybill, for eight agricultural commodities. In those cases, the charge is $105 per loaded car.

Utilities that operate coal-fired power plants have filed numerous rate challenges against railroads over the years.

12 thoughts on “Nebraska utility to challenge Union Pacific reciprocal switch rate

  1. CStPM&O crews still worked at the North Yard in Omaha into the 1980’s. The last qualified steam engineer for the Omaha road out of Omaha just passed away recently. Dick Shepard. The CStPM&O employees had different checks than C&NW employees. The Omaha Road guys could not bid a job in Council Bluffs as they belonged to a different seniority roster. The C&NW did let the CMO guys bid onto jobs on the Coal line when it opened.
    The Omaha’s road roundhouse was sold to a paper recycling company and many fires occurred there over the years. The Omaha Road had a pretty good sized freight house in Omaha also.

  2. I am periodically dazzled by the specific knowledge of some Trains readers, such as Mr. Rice in this case, who can really educate the rest of us on specific conditions, history and operations. Thank you!

  3. How did UP come to own this ROW in the first place? It used to be the Chicago, St. Paul, Minneapolis and Omaha Railway line from Sioux City to Omaha via Emerson and Lyons. CNW took over ownership in 1883 and the line was active as late as 1955 then CNW started deferring maintenance north of Oakland. Then around 1967 the line was pulled from Lyons to Emerson. Then it was pulled back from Lyons back to Tekemah in around 1972. Sometime after that it was pulled back from Tekemah, through Fort Calhoun all the way down to North Omaha. A small section is left today south of Blair to service the Fort Calhoun Nuclear Power Plant.

  4. It is more than 8 miles of costs for UP. Have to look at how UP operates that industrial lead into Carter Lake and Pershing Drive to reach the power plant. The lead is essentially an orphan and not connected to UP’s national network.

    An engine pair has to come out of the yards at Council Bluffs, cross the Missouri River and then switch over to BNSF track at the 10th Street switch and go down BNSF owned (mainline) track to Gibson Yard. There they pick up the consist and after traversing back north (again on BNSF tracks) for a couple of miles they become home rails after going under the Heartland Park pedestrian overpass. (Big sign there warns engineers that it is UP) Then its UP for 6 more miles up to the power plant.

    The customer has no other choice. CN has the same problem. They too have customers in the same industrial area and when they pulled up the direct track from the Council Bluffs yard that had its own dedicated swing span over the Missouri River, they orphaned it as well. They also have to send an engine pair from their yard in Council Bluffs, send it over UP to get to BNSF Gibson and pull a load up what becomes UP track and then have a local yard to store and switch in their customers.

    How did it get like this? Well MoPac used to serve this area. CN cut their direct link and probably rake their customers over as well. UP maintains this spur to 286k weight standards, but I am guessing some of these costs are purely due to the operational “hassle factor” on behalf of the UP.

  5. If I remember correctly didn’t the UP have the contract (mine to power plant) and lost it to BNSF. Just making OPPD pay for their losing the big share of the move.

  6. I wonder if the UP uses a local or yard crew or is this the case of calling a road crew for a day’s pay for an 8 mile trip?

  7. To move 50 cars 8 miles @ $295 each is $14,750. Wonder what BNSF gets. Don’t know what the cost of locomotive use is but a loaded crew cost of $2,000 leaves lots of (in my mind excessive) charges. Will be interesting to see where this goes.

    1. Whoops. Should have used the $105 charge which is $5,250. Still an interesting break point.

    2. It’s not just the fuel and crew cost you need to include, you also have to include the cost of picking up the consist from the yard, the delivery, the maintenance of the railroad track structure from the ground up, dispatching, signaling., etc., etc., etc.. Also, I think your $2000 amount for the crew is on the low side…but that’s just my opinion. If the utility is trying to equate coal with agriculture, I’ve got a bridge to sell them…coal is not even close to agriculture, that’s like apples to asparagus.

    3. The cost of picking up the consist from the yard and delivery are is the crew and fuel cost. All cost and profits are rolled into the customer charge. Thanks haven’t seen any 50 car coal trains. I suspect the trains are at least 100 cars which would be knocking on $30,000 for the eight mile move. A little excessive and probably retaliation for the utility shipping the long haul over BNSF. Not sure what deference there is in coal or grain when it comes to moving cars. The weights are close and the cars all have eight wheels. Seems like apples to apples to me. Where’s the asparagus?

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