Notice of Rail Energy Transportation Advisory Committee Meeting
Notice is hereby given of a meeting of the Rail Energy Transportation Advisory Committee (RETAC), pursuant to section 10(a)(2) of the Federal Advisory Committee Act, Public Law 92-463, as amended (5 U.S.C., App. 2).
Railroad Cost Recovery Procedures-Productivity Adjustment
In a decision served on February 5, 2009, we proposed to adopt 1.012 (1.2% per year) as the measure of average change in railroad productivity for the 2003-2007 (5-year) averaging period. This value was a decline of 0.1 of a percentage point from the current measure of 1.3% that was developed for the 2002-2006 period. That decision stated that comments may be filed addressing any perceived data and computational errors in our calculation. It also stated that, if there were no further action taken by the Board, the proposed productivity adjustment would become effective on March 1, 2009.
Simplified Standards for Rail Rate Cases-Taxes in Revenue Shortfall Allocation Method; Correction
The Surface Transportation Board published a document in the Federal Register on January 30, 2009, which directed the Association of American Railroads, and permitted other parties, to file supplemental evidence so that the Board has a full record on which to base its methodology to calculate a railroad-specific average state tax rate for use in the Revenue Shortfall Allocation Method. The published document contained an incorrect date.
Use of a Multi-Stage Discontinued Cash Flow Model in Determining the Railroad Industry's Cost of Capital
By a decision served on January 28, 2009, the Board modified its methodology for determining the cost of capital for the railroad industry by adopting the average of the estimates produced by its Capital Asset Pricing Model (CAPM) with the Morningstar/Ibbotson multi- stage Discontinued Cash Flow (DCF) model to estimate the railroad industry's cost of equity.