Tom O'Connor Group

Economic and management consulting firm

Ex Parte 711 supports access to Competitive Switching

We have appeared in the Opening Round of Ex Parte 711, the Competitive Switching proceeding at the Surface Transportation Board (STB) on behalf of one of our clients.  We filed evidence supporting Competitive Switching, as in  the NITL proposal.    The Opening Statement we filed in Ex Parte 711, the Competitive Switching proceeding at the STB is included on our website.  Here is an excerpt:

______________________________________________________________

I.    Introduction

My name is Tom O’Connor; I am President of The Tom O’Connor Group, LLC. (“Tom O’Connor Group” or “TOGC”). I have prepared this Verified Statement working in conjunction with John Legieza who is a Principal of The Tom O’Connor Group, LLC.  The Tom O’Connor Group is an economic and management consulting company with offices located at 13222 Point Pleasant Drive, Fairfax, VA 22033.  Throughout my career my practice has focused primarily on transportation, telecom and logistics industries.   A statement of my qualifications and experience is included as Exhibit No. (TOC__1) to this Opening Verified Statement.  A statement of John Legieza’s qualifications and experience is included as Exhibit No. (JL__1) to this Opening Verified Statement.

At the request of our client, Glacial Lakes Energy (“GLE”) we reviewed our prior relevant work on behalf of GLE and we have analyzed the record in Surface Transportation Board (“STB”) Ex Parte 711, PETITION FOR RULEMAKING TO ADOPT REVISED COMPETITIVE SWITCHING RULES.  Specifically, we  focused on the STB Decisions dated July 25, 2012, and October 25, 2012.  The October 25, 2012 STB decision extended the filing dates.  The July 25, 2012 STB decision can be summarized as follows:

This decision begins a proceeding to consider a proposal submitted by The National Industrial Transportation League (NITL) to increase rail-to-rail competition.  Under its proposal, certain shippers located in terminal areas that lack effective competitive transportation alternatives would be granted access to a competing railroad, if there is a working interchange within a reasonable distance (30 miles under NITL’s proposal).  The Surface Transportation Board (the Board) is seeking empirical information about the impact of the proposal, if it were to be adopted.  Specifically, the Board is seeking public input on the proposal’s impact on rail shippers’ rates and service, including shippers that would not benefit under NITL’s proposal; the proposal’s impact on the rail industry, including its financial condition and network efficiencies; and methodologies for the access price that would be used in conjunction with competitive switching.

II.   Initial Analysis and Findings

Our initial analysis and our findings can be summarized as follows:

  •      We support the NITL proposal

We support the NITL proposal – it helps remedy a number of issues centering on access to competition while recognizing and accommodating the ongoing need for railroads to maintain adequate financial strength and continue to build efficiency and productivity

  •      Access Price for use in conjunction with competitive switching.

We propose use of a mutually agreed trackage rights fee or haulage rights fee for covering the costs associated with reaching the competitive switching carrier. Both trackage rights fees and haulage rights fees are well established concepts in the rail industry.[1]  If the parties in a given switching access situation cannot agree on such fees we recommend that the STB prescribe a reasonable access fee.

  •      Commodity Focus area

In the prior testimony we focused on the principal commodities transported by Glacial Lakes Energy, our client. These commodities are: Corn, Ethanol and Distillers Dried Grain (DDG).  We have analyzed and reflect the 2010 STB Confidential Waybill file made available for use in this proceeding: however we rely primarily on our analyses of Glacial Lakes Energy data.

[1] Trackage rights are agreements whereby a railroad company secures the right to run its trains on tracks owned by another railroad company. Generally speaking, with trackage rights railroad A allows railroad B the authority to operate over railroad A’s tracks using railroad B ‘s locomotive power and crews. Haulage rights are more restrictive – usually railroad A agrees to handle railroad B’s traffic at an agreed upon per car or per mile rate, utilizing railroad A’s crews. Locomotive power for use in haulage rights is also negotiated and could be provided by either railroad A or B  depending on the specific agreement.

______________________________________________________________

Our prior testimony in Ex Parte 711 supports access to Competitive Switching.  We have already done much of the basic analysis that would be required to produce the data that would support Access to Competitive Switching in the upcoming STB hearings slated for October 2013.

 

Read the document here

 

Thanks,

 Tom O’Connor

The Tom O’Connor Group

Economic and Management Consultants

A Veteran-Owned Company

Tom@TomOConnorGroup.com

571 332 2349

781 626 6667 international

www.TomOConnorGroup.com

 

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