RULES AND OTHER GOVERNING PROVISIONS SPECIAL RULES AND REGULATIONS UNLIMITED Application (Applicable only where specific reference is made to this item) (a) Except, as otherwise provided in Paragraph (h) and subject to the provisions of this item, rate in item making reference to this item is applicable only on shipments from a consignor at one origin in such item, to a consignee who receives at one destination in such item not less than the volume requirement specified in Paragraph (b) below of one ог more of the commodities named in items referring to this item. VOLUME REQUIREMENTS (b) 1,000,000 tons received during the 12-month period commencing with the date of written notification to the ATSF and SP and thereafter during 12-month periods commencing with the anniversary day of the first 12-month period. (c) Initially, the rate in item making reference to this item shall be (d) Before the beginning of each 12-month period described in (f) If during any 12-month period described in Paragraph (b), the (g) Certification of shipments moving at such rates shall be made by SP. DISABILITY RULE (h) If during any calendar day or days (See Notes 2 and 3) in any 12month period stated in Paragraph (b) of this item shipments cannot be made under rate referring hereto by a consignor to a consignee due to an act of God, strikes or lockouts in the railroad industry or stricks or lockouts or mechanical breakdown or fire (See Note 4) in the consignor's or consignee's plant or facilities (See Notes 1 and 5), the calendar day or days during that 12month period in which shipments due to such occurences cannot be made shall be considered as a disability day or days and the For explanation of abbreviations, see concluding page of this tariff. RULES AND OTHER GOVERNING PROVISIONS SPECIAL RULES AND REGULATIONS UNLIMITED Application minimum aggregate tonnage required of that consignee during that 12-month period shall be reduced by 1/365 for each such disability day. Any day in which two or more of such events occur shall be considered as one disability day. NOTE 1.-The consignor, consignee or participating carrier encountering disability days shall within 30 days of the date the disability occurred notify the carrier or inspection bureau, as the case may be, having jurisdiction over the volume movement, of such disability and shall furnish a certificate stating: "This is to certify that on (month-day-year) the following disabilities occurred (here show type of disability as provided in Paragraph (h)) thereby resulting in authorized reduction in volume tonnage as specified in (here show specific paragraph, item number and ICC number of tariff)." NOTE 2.-If shipments are made by a consignor to a consignee under this item during any calendar day in which one or more of the events specified in this paragraph occur, that day with respect to shipments from the consignor to the consignee shall not be considered as a disability day. NOTE 3.-Saturdays, Sundays and legal holidays shall not be New Year's Day. Washington's Birthday, Memorial Day, In the event one of the above holidays occurs on a Sunday, the NOTE 4.-A breakdown or fire in the consignor's or consignee's plant or facilities will include only the mechanical failure of equipment of consignor or consignee vital to the coal loading or unloading operation or any fire which renders the loading or unloading facilities inoperative. In order for carrier to be in a position to promptly make necessary arrangements to avoid expenses that occur in holding crew and power, such breakdown or fire must be immediately reported by telephone by the consignor or consignee to the origin or destination carrier and then immediately certified in writing by the consignor or consignee to the origin or destination carrier with sufficient evidence, including actual time of such breakdown or fire, to For explanation of abbreviations, see concluding page of this tariff. Applica- 150 (con't) substantiate a legitimate cause of disruption to consignor's or consignee's normal coal loading or unloading operation. The consignor or consignee must also immediately report by telephone and then immediately certify in writing to the origin or destination carrier the exact time the cause of such breakdown or fire terminates. NOTE 5.-Mechanical breakdown ог fire in consignor's or consignee's plant or facility as referred to herein will only apply as a disability day for computing reduced minimum aggregate tonnage but such disability will be subject to provisions of Item 145. Rule 4(i) of Tariff Circular waived; ICC Permission No. Min. Wt. NMCC PSFB RER SP TCFB UFC WTL Explanation Arizona Corporation Commission Atchison, Topeka and Santa Fe Railway Company. The Minimum Weight New Mexico State Corporation Commission Pacific Southcoast Freight Bureau, Agent Southern Pacific Transportation Company Trans-Continental Freight Bureau Uniform Freight Classification (Uniform Classification Com- Western Trunk Lines (Western Trunk Line Committee, Agent) APPENDIX B Analysis of cost data I. INTRODUCTION Arizona Electric Power Cooperative, Inc. (AEPC) is engaged in the construction of two new electric generating units at its Apache Station located at Cochise, Ariz. The $270 million facility will burn 1 million tons of coal annually. The coal supplies will be obtained from sources near Gallup, N. Mex. AEPC originally brought a complaint against the Atchison, Topeka and Santa Fe Railway Company (AT&SF or Santa Fe) and Southern Pacific Transportation Company (SP) in docket No. 36515, Arizona Electric Power Cooperative, Inc. v. The Atchison Topeka and Santa Fe Railway Company and Southern Pacific Transportation Company. The complainant requested that the Commission prescribe a rate of $4.38 per ton for the movement of an annual volume of one million tons of coal in shipper supplied cars from Gallup, N. Mex., to Cochise, Ariz. At that time, the rate applicable to coal from the subject origin to subject destination was $12.53 per ton in railroad supplied cars and $12.16 per ton in shipper owned cars. Subsequent to the complaint filed in docket No. 36515, supra, the AT&SF and SP filed a "Notice of Intention to File Schedules Containing a Capital Investment Rate on Coal from Gallup, New Mexico to Cochise, Arizona." The AT&SF and SP, hereinafter referred to as respondents, propose a freight rate of $8.64 per net ton. The proposed tariff specifies that the rate referred to above will be applicable only to a minimum tender of 1 million tons annually in other than carrierowned equipment and would further apply only to shipment tenders of not less than 90 cars nor more than 95 cars loaded to full visible capacity, subject to a minimum weight of 195,000 pounds per car. Shipments would move on one bill of lading from one consignor to one consignee. The rate further includes the return movement of empty cars to the origin mine. No allowance will be paid by the railroads to the owner of the cars. In addition to the line-haul freight rate, the railroad's proposed schedule includes a charge of $47 for switching performed at the AEPC plant. The proposed capital incentive rate was initiated because respondents claim it will be necessary to make a capital investment of approximately $12 million. Pursuant to section 206 of the Railroad Revitalization and Regulatory Reform Act of 1976, a carrier may file a notice of intent to file a new rate whenever the implementation of the proposed schedule would require a total capital investment of $1 million or more. Unless the Commission determines that the proposed rate is unlawful, the carrier may file the schedule, which may not then be set aside as unlawful for a period of 5 years after its effective date. Accordingly, unless the proposed rate is found to be unlawful, no rate can be prescribed in the above referenced complaint proceeding. The evidence of record in the instant proceeding is co-mingled with the evidence in the related complaint case. (Docket No. 36515.) Although AEPC, hereinafter referred to as protestant, developed a variable cost per ton of $3.31, in the instant proceeding; it subsequently presented its cost showing to reflect a variable cost of $2.92 per ton in its rebuttal statement in docket No. 36515, supra. Our analysis of the instant proceeding follows below and is confined to cost evidence of record in docket No. 36612. II. PROTESTANT'S OPENING STATEMENT Arizona Electric Power Cooperative, Inc. (protestant) introduced a variable cost per ton of $3.31 which equates to a variable cost per carload of $327.36. Protestant contends its presentation of variable.costs was developed using 1976 basic Rail Form A' unit costs for each of the involved railroads, (SP and AT&SF). Such Rail Form A costs were indexed to July 1, 1977, based on AAR (Association of American Railroads) indices for fuel, material, and supplies and labor. Update factors were developed separately for application to the Rail Form A data of each railroad. Protestant has, were possible, substituted direct costs and adjusted Rail Form A unit costs to reflect the traffic and operating characteristics peculiar to the subject traffic. Table 1 below, is a summary of traffic and operating characteristics used by protestant in its development of variable costs. Protestant indicates that the average load per car and the tare weight per car (shown in table 1) were taken from the design specifications of the manufacturer. Further, protestant states that based on a "recent field survey" it was determined that four diesel-electric locomotive units would be required by each railroad in completing its portion of the subject movement. Expenses relating to train crew cost and station clerical expense were developed separately in lieu of the corresponding unit costs in Rail Form A. Train crew cost per carload was derived using basic daily and mileage rates as of July 1, 1977, actual crew districts and mileages, actual weights of the locomotive units (used to determine 'Rail Form A (ICC Statement No. 1F1-73), Formula for Use in Determining Rail Freight Service Costs. |