Buffalo & Pittsburgh Railroad Inc.-Lease and Operation Exemption-Norfolk Southern Railway Company, 45494 [E7-15861]
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Federal Register / Vol. 72, No. 156 / Tuesday, August 14, 2007 / Notices
comments on the use of a fixed number
instead.
To calculate the Beta for each carrier,
we propose to use that carrier’s
monthly, merger-adjusted 1 stock return
data for the prior 10 years in the
following standard equation:
R ¥ RF = b (RM ¥ RF) + e
mstockstill on PROD1PC66 with NOTICES
R = merger-adjusted monthly stock return for
the railroad;
RF = monthly 10-year U.S. Treasury bond
rate;
RM = monthly return on the NYSE; and
e = random error term
Using a simple, ordinary least squares
(OLS) regression technique, the Board
would estimate b, the coefficient of
systematic, non-diversifiable risk. OLS
regression technique is a simple but
accepted statistical tool one can use to
develop an unbiased estimate of the true
Beta. There would always be 120
months of data. Each year, 12 months of
new data would be added to the data set
and the oldest 12 months of
observations would be removed.
In selecting a 10-year time period to
estimate Beta, we seek to balance the
desire to eliminate statistical noise and
achieve stability in the estimate, while
allowing for the fact that Beta may
change over time. Using earlier data
might cause results to be skewed by
events that are no longer important. On
the other hand, using a shorter
timeframe—while capturing changes in
industry risk profiles more rapidly—
would introduce more variability and
noise in the estimate. We also invite
comment on the use of 25-year or 5-year
time periods. Anything less than five
years appears to add too much noise.
Green, Lopez, & Wang, Formulating the
Imputed Cost of Equity Capital for
Priced Services at Federal Reserve
Banks, FRBYU Econ. Policy Rev. at 70
(Sept. 2003).
We invite comments on whether it
would be reasonable to assume that Beta
equals 1, thereby eliminating the need
to estimate Beta. Finance theory
predicts that Beta will move towards 1
over time, and this has proved true for
banks and other firms that provide
payment processing services. See
Hearing Tr. at 25. We also invite
comments on the inclusion of an
intercept term in the regression.
We have reviewed and reject other
suggested changes to our existing
procedures. First, we reject WCTL’s
suggestion that parties should be
1 ‘‘Merger-adjusted’’
means that, in instances
where a carrier has been formed by merger of
several predecessor railroads, data for the shares of
predecessor railroads are included in such a way as
to show total performance as if the merger had
already occurred.
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16:35 Aug 13, 2007
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permitted to argue for an alternate
approach to be used in a particular year.
Second, we will not adjust the debt
portion of capital to reflect the
capitalization of operating leases, as
requested by WCTL. Third, we reject
WCTL’s suggestion to replace the
current-year debt-to-equity ratio with a
multi-year average to avoid alleged
‘‘artificial’’ fluctuations in the capital
structure used to calculate the weighted
average. Finally, we will not expand the
scope of this rulemaking to re-examine
how this cost-of-capital determination is
used in the Board’s annual revenue
adequacy determinations and consider
using a replacement-cost analysis, as
suggested by the AAR.
In a decision served on August 14,
2007, the Board has discussed each of
these proposals in detail and explained
how each addresses concerns raised in
this proceeding. Because these
proposals have significance for rail
carriers and their shippers, all interested
parties are invited to comment.
Additional information is contained
in the Board’s decision. To obtain a free
copy of the full decision, visit the
Board’s https://www.stb.dot.gov Web site.
Pursuant to 5 U.S.C. 605(b), the Board
certifies that the proposed action should
not have a significant economic effect
on a substantial number of small entities
within the meaning of the Regulatory
Flexibility Act.
This action will not significantly
affect either the quality of the human
environment or the conservation of
energy resources.
Decided: August 8, 2007.
By the Board, Chairman Nottingham, Vice
Chairman Buttrey, and Commissioner
Mulvey.
Vernon A. Williams,
Secretary.
[FR Doc. E7–15888 Filed 8–13–07; 8:45 am]
BILLING CODE 4915–01–P
DEPARTMENT OF TRANSPORTATION
Surface Transportation Board
[STB Finance Docket No. 35044]
Buffalo & Pittsburgh Railroad Inc.—
Lease and Operation Exemption—
Norfolk Southern Railway Company
AGENCY:
approximately 35.9 miles of a line of
railroad owned by the Norfolk Southern
Railway Company. The rail line extends
from milepost BR 8.8 near Gravity, NY,
to milepost BR 44.7+/¥, immediately
south of the northbound home signal
and insulated joint for CP-Machias near
Machias, NY. The exemption is subject
to employee protective conditions.
The exemption will be effective
on August 27, 2007. Petitions to stay
must be filed by August 21, 2007.
Petitions to reopen must be filed by
September 4, 2007.
DATES:
An original and 10 copies of
all pleadings, referring to STB Finance
Docket No. 35044, must be filed with
the Surface Transportation Board, 395 E
Street, SW., Washington, DC 20423–
0001. In addition, one copy of all
pleadings must be served on petitioner’s
representative: Eric M. Hocky, Gollatz,
Griffin & Ewing, P.C., Four Penn Center,
Suite 200, 1600 John F. Kennedy Blvd.,
Philadelphia, PA 19103–2808.
ADDRESSES:
FOR FURTHER INFORMATION CONTACT:
Joseph H. Dettmar, (202) 245–0395.
[Assistance for the hearing impaired is
available through the Federal
Information Relay Service (FIRS) at 1–
800–877–8339.]
SUPPLEMENTARY INFORMATION:
Additional information is contained in
the Board’s decision. To purchase a
copy of the full decision, write to, email, or call: ASAP Document
Solutions, 9332 Annapolis Rd., Suite
103, Lanham, MD 20706; e-mail
asapdc@verizon.net; telephone: (202)
306–4004. [Assistance for the hearing
impaired is available through FIRS at 1–
800–877–8339.]
Board decisions and notices are
available on our Web site at https://
www.stb.dot.gov.
Decided: August 8, 2007.
By the Board, Chairman Nottingham, Vice
Chairman Buttrey, and Commissioner
Mulvey.
Vernon A. Williams,
Secretary.
[FR Doc. E7–15861 Filed 8–13–07; 8:45 am]
BILLING CODE 4915–01–P
Surface Transportation Board,
DOT.
ACTION:
Notice of exemption.
SUMMARY: Under 49 U.S.C. 10502, the
Board is granting a petition for
exemption from the prior approval
requirements of 49 U.S.C. 10902 for
Buffalo & Pittsburgh Railroad, Inc., a
Class II rail carrier, to lease and operate
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[Federal Register Volume 72, Number 156 (Tuesday, August 14, 2007)]
[Notices]
[Page 45494]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-15861]
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DEPARTMENT OF TRANSPORTATION
Surface Transportation Board
[STB Finance Docket No. 35044]
Buffalo & Pittsburgh Railroad Inc.--Lease and Operation
Exemption--Norfolk Southern Railway Company
AGENCY: Surface Transportation Board, DOT.
ACTION: Notice of exemption.
-----------------------------------------------------------------------
SUMMARY: Under 49 U.S.C. 10502, the Board is granting a petition for
exemption from the prior approval requirements of 49 U.S.C. 10902 for
Buffalo & Pittsburgh Railroad, Inc., a Class II rail carrier, to lease
and operate approximately 35.9 miles of a line of railroad owned by the
Norfolk Southern Railway Company. The rail line extends from milepost
BR 8.8 near Gravity, NY, to milepost BR 44.7+/-, immediately south of
the northbound home signal and insulated joint for CP-Machias near
Machias, NY. The exemption is subject to employee protective
conditions.
DATES: The exemption will be effective on August 27, 2007. Petitions to
stay must be filed by August 21, 2007. Petitions to reopen must be
filed by September 4, 2007.
ADDRESSES: An original and 10 copies of all pleadings, referring to STB
Finance Docket No. 35044, must be filed with the Surface Transportation
Board, 395 E Street, SW., Washington, DC 20423-0001. In addition, one
copy of all pleadings must be served on petitioner's representative:
Eric M. Hocky, Gollatz, Griffin & Ewing, P.C., Four Penn Center, Suite
200, 1600 John F. Kennedy Blvd., Philadelphia, PA 19103-2808.
FOR FURTHER INFORMATION CONTACT: Joseph H. Dettmar, (202) 245-0395.
[Assistance for the hearing impaired is available through the Federal
Information Relay Service (FIRS) at 1-800-877-8339.]
SUPPLEMENTARY INFORMATION: Additional information is contained in the
Board's decision. To purchase a copy of the full decision, write to, e-
mail, or call: ASAP Document Solutions, 9332 Annapolis Rd., Suite 103,
Lanham, MD 20706; e-mail asapdc@verizon.net; telephone: (202) 306-4004.
[Assistance for the hearing impaired is available through FIRS at 1-
800-877-8339.]
Board decisions and notices are available on our Web site at http:/
/www.stb.dot.gov.
Decided: August 8, 2007.
By the Board, Chairman Nottingham, Vice Chairman Buttrey, and
Commissioner Mulvey.
Vernon A. Williams,
Secretary.
[FR Doc. E7-15861 Filed 8-13-07; 8:45 am]
BILLING CODE 4915-01-P
