Utility sues railroad claiming monopoly abuse

subscribe

A Mississippi power company has sued Norfolk Southern Railway Company for millions of dollars, claiming the railroad uses a monopoly over coal deliveries to inflate costs.

Hattiesburg-based South Mississippi Electric Power Association SMEPA said Norfolk Southern is the only railroad company that delivers coal from the Appalachias to Plant Morrow, the utility's main electricity generating station located in Purvis, Miss.

The power company claims Norfolk Southern has used that control over coal delivery since 1978 to negotiate price increases of between 60 percent and 80 percent each time the companies' contracts face renewal. The latest contract expired December 31.

The power company also claims Norfolk Southern Railway racked up 130,000 tons of delivery shortfalls in 2010.

"Our rail costs have continued to rise significantly while the service we receive has steadily deteriorated," SMEPA spokesman Kurt Brautigam said in a statement. He added that, regrettably, the utility had no other recourse but to file litigation seeking relief from the "monopolistic abuse" it claims it is subjected to by Norfolk Southern.

SMEPA filed the suit December 29 in U.S. District Court in south Mississippi, but documents related to the case are sealed.

The court docket listed the lawsuit demand as $34 million. Brautigam, however, said the lawsuit seeks $17 million. Brautigan said he didn't know the reason for the discrepancy. The lawsuit was filed under seal and is not open to public viewing.

Rudy Husband, a spokesman for Virginia-based Norfolk, said the company doesn't comment on pending litigation.

The power company said that Norfolk wants a rate increase beginning in 2011 that will be four times higher than the amount the railroad charged under contract as recently as 2003. SMEPA said such a rate hike would be especially hard because it is a nonprofit company.

Brautigam said SMEPA also filed a complaint with the National Surface Transportation Board, saying it was "seeking relief from excessive and unreasonable future rates."

SMEPA provides wholesale power for eleven distribution cooperatives that provide electricity to 406,000 homes and businesses in 52 Mississippi counties.

Related News

alberta-last-coal-plant-closes-embracing-clean-energy

Alberta's Last Coal Plant Closes, Embracing Clean Energy

ALBERTA - The closure of the Genesee Generating Station on September 30, 2023, marked a significant milestone in Alberta's energy history. The Genesee, located near Calgary, was the province's last remaining coal-fired power plant. Its closure represents the culmination of a multi-year effort to transition Alberta's electricity sector away from coal and towards cleaner sources of energy.

For decades, coal was the backbone of Alberta's electricity grid. Coal-fired plants were reliable and relatively inexpensive to operate. However, coal also has a significant environmental impact. The burning of coal releases greenhouse gases, including carbon dioxide, a major contributor to climate change.…

READ MORE
taipei protest

EPA, New Taipei spar over power plant

READ MORE

manitoba hydro office

Manitoba Hydro's burgeoning debt surpasses $19 billion

READ MORE

Britons could save on soaring bills as ministers plan to end link between gas and electricity prices

READ MORE

portland general electric

Portland General Electric Program Will Transform Hundreds of Homes Into a Virtual Power Plant

READ MORE