W. Va. Code R. § 150-12-3

Current through Register Vol. XLI, No. 50, December 13, 2024

Section 150-12-3 - Investigation and Suspension of Railroad Rates

3.1. Commencement of Proceedings.

a. When a new individual or joint rate (except general rate increases, inflation based increases, or fuel adjustment surcharges filed under the provisions of 49 U.S.C. '11501(b)(6) over which the Public Service Commission of West Virginia has no jurisdiction) or an individual or joint classification, rule, or practice related to a rate is filed with the Public Service Commission of West Virginia by a rail carrier the Commission may:

1. on its own initiative, commence an investigation proceeding, or

2. upon protest of an interested party commence an investigation proceeding, or

3. upon protest of an interested party commence an investigation and suspension proceeding to determine whether the proposed rate classification, rule or practice is discriminatory, unreasonable, or in any other way violates applicable law.

b. Rates based on limited carrier liability may be published and filed with the Commission, without prior approval, pursuant to 49 U.S.C. '10730. However, such rates will be subject to protest on grounds such as unreasonableness or nonconformance with the tariff publication requirements found in 49 CFR 1300.4(i)(11).

c. The Commission shall give reasonable notice to interested parties before beginning a proceeding. However, the Commission may begin the proceeding without allowing an interested party to file an answer.

3.2. Duration of suspension period.

a. The Commission shall complete a proceeding commenced under Rule 3.1(1)(a) or (b) or (c) of these Rules within five (5) months from the effective date of the proposed rate, classification, rule or practice except that if the Commission reports to the Interstate Commerce Commission that it cannot make a final decision within that time and explains the reason for the delay, it may then take an additional three (3) months to complete the proceeding and make a final decision.

b. If the Commission does not render a final decision within the applicable time period the rate, classification, rule or practice shall become effective immediately or, if already in effect, shall remain in effect.

c. However, if a railroad makes a tariff filing to adjust an intrastate rate, rule or practice under 49 U.S.C. '11501(d) to that of similar traffic moving in interstate commerce, and the Commission investigates such tariff in accordance with Rule 3.1 or suspends such tariff filing in accordance with Rule 3.3, the carrier may apply to the Interstate Commerce Commission to review the matter if the Public Service commission of West Virginia has not acted with finality by the 120th day after the tariff was filed. If the carrier elects not to refer the matter to the Interstate Commerce Commission the Public Service Commission of West Virginia may decide the issue within five months, as provided for in Rule 3.2(a).

3.3. Grounds for suspension.

a. The Commission may not suspend a proposed rate, classification, rule, or practice unless it appears from the specific facts shown by the verified statement of a person that:

1. there is a substantial likelihood that the protestant will prevail on the merits;

2. without suspension, the proposed rate change will cause substantial injury to the protestant or the party represented by the protestant; and

3. because of the peculiar economic circumstances of the protestant, the provisions of Rule 3.8 of these rules do not protect the protestant.

b. The Commission will not suspend rates upon its own motion.

3.4. Market dominance.

a. When the new individual or joint rate is alleged to be unreasonably high, the Commission, within ninety (90) days after the start of a proceeding under these rules, shall determine whether or not the railroad proposing the rate has market dominance over the transportation to which the rate applies.

b. If the Commission finds that:

1. the railroad proposing the rate has market dominance over the transportation to which the rate applies, it shall then proceed to determine whether or not the proposed rate exceeds a maximum reasonable level for that transportation.

2. the railroad proposing the rate does not have market dominance over the transportation to which the rate applies, it shall make such a finding pursuant to 49 U.S.C. '10709(d).

c. A finding by the Commission that the proposed rate has a revenue variable cost percentage which is equal to or greater than the percentages found in 49 U.S.C. '10709 (d)(2) does not establish a presumption that:

1. the railroad has or does not have market dominance over such transportation, or

2. the proposed rate exceeds or does not exceed a reasonable maximum level.

d. Evidentiary guidelines for the determination of whether or not the railroad has market dominance over the transportation to which the rate applies shall be found under Rule 5.

3.5. Reasonableness.

a. Except for nonferrous recyclables, the Commission shall evaluate the reasonableness of a rate only after market dominance has been established. Moreover, the Commission shall evaluate the reasonableness of rates following the decisional standards applied by the Interstate Commerce Commission in Coal Rate Guidelines, Nationwide, 1 I.C.C.2d 520 (1985); and Ex Parte No. 347 (Sub-No. 2) Rate Guidelines -- Non Coal Proceedings (April 8, 1987). In determining whether a rate is reasonable, the Commission shall consider among other factors, evidence of the following:

1. the amount of traffic which is transported at revenues which do not contribute to going concern value and efforts made to minimize such traffic;

2. the amount of traffic which contributes only marginally to fixed costs and the extent to which, if any, rates on such traffic can be changed to maximize the revenues from such traffic; and

3. the carrier's mix of rail traffic to determine whether one commodity is paying an unreasonable share of the carrier's overall revenues.

b. The Commission will evaluate the reasonableness of rates for nonferrous recyclables in accordance with Ex Parte 394 (Sub-No. 5), Cost Ratio for Recyclables - 1988, served September 15, 1988, and other future adjustments to these criteria which are adopted by the Interstate Commerce Commission.

3.6. Burden of proof.

a. General. -- The burden shall be on the protestant to prove the matters described in Rule 3.3(a)(1)-(3) of these rules.

b. Market dominance:

1. Jurisdiction. -- The respondent railroad shall bear the burden of showing that the Commission lacks jurisdiction to review the proposed rate because the rate produces a revenue variable cost percentage that is less than the percentages found in 49 U.S.C. '10709(d)(2). The railroad may meet its burden of proof by showing the revenue variable cost percentage for that transportation to which the rate applies is less than the threshold percentage cited in 49 U.S.C. '10709(d) (2). The protestant may rebut the railroad's evidence with a showing that the revenue variable cost percentage is equal to or greater than the threshold percentage in 49 U.S.C. '10709 (d)(2).

2. Intramodal and intermodal competition. -- The protestant shall bear the burden of demonstrating that there exists no effective intramodal or intermodal competition for the transportation to which the rate applies. Respondent railroad may rebut the protestant's showing with evidence that effective intramodal or intermodal competition exists.

3. Product and geographic competition. -- If intramodal or intermodal competition is shown not to exist, the respondent railroad shall have the burden of proving that either product or geographic competition for the involved transportation does exist. The protestant shall have the burden of proving that such competition is not effective.

c. Reasonableness:

1. Rate increases:

A. Protestant's burden of proof. -- A party protesting a rate increase shall bear the burden of demonstrating its unreasonableness if such rate:

i) is authorized under 49 U.S.C. '10707a; and

ii) results in a revenue-variable cost percentage for the transportation to which the rate applies that is less than the lesser of the percentages described in clauses (i) and (ii) of 49 U.S.C. 10707 a(e)(2)(A).

B. Respondent's burden of proof. -- The respondent railroad shall bear the burden of demonstrating the reasonableness of a rate increase if such rate:

i) is greater than that authorized under 49 U.S.C. '10707a, or

ii) results in a revenue variable cost percentage for the transportation to which the rate applies that is equal to or greater than the lesser of the percentages described in clauses (i) and (ii) of 49 U.S.C. '10707a(e)(2)(A); and

iii) the Commission initiates an investigation under 49 U.S.C. '10707.

2. Rate Decreases. -- A party protesting a rate decrease shall bear the burden of demonstrating that the rate does not contribute to the going concern value of the railroad, and it therefore unreasonably low. A party may meet its burden by making a showing that the rate is less than the variable cost for the transportation to which the rate applies.

3.7. Zone of rate flexibility.

a. A rail carrier may raise any rate pursuant to the limitations described in 49 U.S.C. '10707a. Base rates increased by the quarterly rail cost adjustment factor will not be investigated or suspended. In addition, a railroad may increase any rate by six percent (6%) per annum (to a maximum of eighteen percent (18%)) over the four (4) year period following enactment of the Staggers Act. Thereafter, railroads not earning adequate revenues, as defined by the Interstate Commerce Commission, may raise rates four percent (4%) per year. Neither the six percent (6%) nor four percent (4%) increase shall be suspended. If the increase results in a revenue to variable cost ratio that equals or exceeds one hundred ninety percent (190%), the Commission may investigate the rate either on its own motion or on complaint of an interested party.

b. In determining whether or not to investigate the rate this Commission shall consider:

1. the amount of traffic which the railroad transports at revenues which do not contribute to going concern value and efforts made to minimize such traffic;

2. the amount of traffic which contributes only marginally to fixed costs and the extent to which rates on such traffic can be changed to maximize the revenues from such traffic;

3. the impact of the challenged rate on national energy goals;

4. state and national transportation policy; and

5. the revenue adequacy goals incorporated in the Interstate Commerce Act.

3.8. Monetary adjustments for suspension actions.

a. Rate increases with no suspensions. -- In the event the Commission does not suspend but investigates a proposed rate increase under Rule 3.3, the Commission shall require the rail carrier to account for all amounts received under the increase until the Commission completes its proceedings under Rule 3.2. The accounting shall specify by whom and for whom the amounts are paid. When the Commission takes final action, it shall require the carrier to refund to the person for whom the amounts were paid that part of the increased rate found to be unreasonable, plus interest at a rate equal to the average yield of marketable securities of the United States Government having a duration of ninety (90) days, said interest rate to be fixed on the date the Commission's order becomes final.

b. Rate increases with suspension. -- If a rate is suspended under Rule 3.3 and any portion of such rate is later found to be reasonable, the carrier shall collect from each person the transportation to which the rate applies the difference between the original rate and the portion of the suspended rate found to be reasonable for any services performed during the period of suspension, plus interest at a rate equal to the average yield of marketable securities of the United States Government having a duration of ninety (90) days, said interest rate to be fixed on the date the Commission's order becomes final.

c. Rate decreases with suspension. -- In the event the Commission suspends a proposed rate decrease under Rule 3.3 which is later found to be reasonable, the rail carrier may refund any part of the decrease found to be reasonable if the carrier makes the refund available to each shipper who participated in the rate, in accordance with the relative amount of such shipper's traffic transported at such rate.

d. Except as provided in subsection (e) of this rule, when the Commission finds that a railroad shall make refunds or is entitled to collect additional freight charges, but the amount cannot be ascertained upon the record before it, the party entitled to the refund shall file a statement showing details of the shipments involved in the Commission's findings. The statement must be submitted to the carrier for verification and certification. The Statement shall present the following information for each shipment and grouped by routes, and accompanied by the paid freight bills or copies thereof;

_____ Date of shipment.

_____Date of delivery or tender of delivery.

_____Date charges were paid.

_____Car initials.

_____Car number.

_____Origin.

_____Destination.

_____Route.

_____Commodity.

_____Weight.

_____Rate.

_____Amount.

_____Refund (or monies due)

on basis of Commission's decision.

______ Charges paid under subection a.

The Commission shall consider such statement in its entry of order thereupon.

e. If the railroad wishes to waive collection of amounts due under Rule 3.8(b) and the amount to be collected is:

1. under two thousand dollars ($2,000). -- Then the railroad may waive collection without notice to the Commission, provided that the rule shall only apply once to any person who used the original rate during the suspension period.

2. two thousand dollars ($2,000) or more. -- then the railroad shall petition the Commission for authority to waive collection. The petition shall contain the following information:

-names and addresses of the customer for whom collection is to be waived.

-certification that all railroads (if more than one is involved in the movement) concur in the waiver.

-amount to be waived.

-information identifying the original case to which the rate adjustment applies.

-a brief statement or justification for the intended waiver.

3. Any person wishing to protest a waiver proposed under Rule 3.8(e)(2) may do so by filing a protest within thirty (30) days of the Commission's receipt of the petition for waiver. The petition shall identify the investigation and suspension docket number, shall clearly state the reasons for the objection and shall certify that copies have been served upon all parties. Railroads shall have forty-five (45) days to file a response to a protest.

4. If the Commission receives a letter of protest, it will notify all parties to the proceeding and the railroad shall not be permitted to take any further action until the Commission makes its findings and enters its order.

5. If no protests are received pursuant to Rule 3.8(e)(3), then the waiver of collection shall be considered approved without further action from the Commission. If protests are received the Commission shall issue a decision, set the matter for hearing, or take whatever other action is warranted by the circumstances.

3.9. Reparation based on commission findings. -- When the Commission finds that damages are due, but that the amount cannot be ascertained upon the record before it, the complainant shall immediately prepare a statement showing details of the shipments on which reparations are claimed, in accordance with Rule 3.8(d).

This statement, together with the paid freight bills on the shipments or true copies thereof, shall then be forwarded to the carrier which collected the charges for verification and certification as to its accuracy. All discrepancies, duplications, or other errors in the statements shall be adjusted by the parties and corrected agreed statements submitted to the Commission.

This statement will be certified by all parties and submitted to the Commission for consideration in entry of its order.

W. Va. Code R. § 150-12-3