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BNSF and Powder River Basin Coal Producer Settle Common Carrier Dispute



November 10, 2023 - BNSF Railway and Navajo Transitional Energy Co. have reached a settlement that will end the coal miner’s common carrier complaint against the railroad.

The companies today asked the Surface Transportation Board to suspend the case until Jan. 8, 2024, which is when BNSF and NTEC expect to conclude their settlement process.

In an April complaint to federal regulators, NTEC claimed that BNSF violated its common carrier obligations by failing to provide adequate service for its Powder River Basin export coal trains.

The coal company also sought an emergency service order from the STB that would require BNSF to handle 29 loaded trains per month from the Spring Creek Mine in Montana to the Westshore Terminals at Roberts Bank in Delta, British Columbia.

BNSF urged regulators to reject the emergency service order, arguing that NTEC’s desire to take advantage of the hot export coal market does not constitute an emergency. BNSF also told the STB it was still experiencing capacity constraints in the Pacific Northwest. Ordering BNSF to increase service to Spring Creek Mine would require the railroad to decrease service to other Powder River Basin customers, the railroad argued.

But the STB, in a 3-2 decision in June, required BNSF to transport 4.2 million tons of coal from Spring Creek this year. BNSF also was required to move an additional one million tons this year as additional coal train sets and train crews become available.

“The common-carrier obligation is a core tenet of the Board’s regulation of the freight railroad industry and is a pillar of the railroads’ responsibility to our country’s economy,” STB Chairman Martin J. Oberman said in a statement. “Today’s decision reflects the majority’s finding that the common carrier obligation requires a railroad to provide service on a customer’s request that is within the railroad’s capacity to provide.”

BNSF Railway subsequently sought a federal judicial review of the preliminary injunction that ordered the railroad to haul more coal for NTEC. The STB rejected BNSF’s request to partially stay the order while the matter was under appeal.

NTEC informed the board, through regular updates, that BNSF service was adequate in recent months and that it likely would not need to use extra coal train sets to handle anticipated demand.

NTEC filed a breach of contract lawsuit against BNSF in federal court in December 2022 related to the railroad’s service in 2022. BNSF favored other coal producers over NTEC’s Spring Creek Mine, the suit claims. A judge this year ordered the two sides to enter arbitration.