WisBusiness: Energy Users Unite Against Railroad Rate Spikes

Wisconsin energy users, along with politicians who often clash, have united against what they claim are excessive rate spikes from monopolistic railroads.

Among those on the same side – the Public Service Commission led by appointees of Democratic Gov. Jim Doyle, Doyle’s agriculture and consumer protection secretary and Republican Congressman Mark Green, who’s trying to beat Doyle in the November election.

Green and Democratic U.S. Sen. Herb Kohl have introduced legislation to take away antitrust exemptions protecting freight railroads from competition.

Kohl and Green say deregulation will spur more competition, improving service and hold down rate increases. Railroad forces say they’re not making enough money to expand capacity and improve service

Energy users contend rate increases from large railroads have raised the price of bringing in coal that fuels much of Wisconsin’s energy needs. Last year, according to the Wisconsin Public Service Commission, Wisconsin utilities incurred nearly $50 million in additional costs associated with shipments of coal, which provides about 60 percent of the state’s energy. These costs are then passed along to consumers.

Dairyland Power in La Crosse, for example, has experienced a 93 percent average increase in rail rages as of January of this year. According to Dairyland, it will now cost about $75 million to ship $30 million worth of coal.

Lobbying for action against the railroads is Badger CURE, which stands for Consumers United for Rail Equity. The national CURE group is led by Robert Szabo.

To discuss the “captive rail’’ issue, WisPolitics interviewed Szabo, Green, PSC Chair Dan Ebert, state Ag Secretary Rod Nilsestuen, Brian Rude of Dairyland Power, and Patrick Schillinger of the Wisconsin Paper Council. The webcast series was sponsored by the Customers First Coalition.

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