Quarterly Rail Cost Adjustment Factor
The Board has approved the second quarter 2014 Rail Cost Adjustment Factor (RCAF) and cost index filed by the Association of American Railroads. The second quarter 2014 RCAF (Unadjusted) is 0.975. The second quarter 2014 RCAF (Adjusted) is 0.421. The second quarter 2014 RCAF-5 is 0.397.
Union Pacific Railroad Company-Acquisition and Operation Exemption-Brownsville and Matamoros Bridge Company
The Board is granting an exemption under 49 U.S.C. 10502 from the prior approval requirements of 49 U.S.C. 11323-25 for Union Pacific Railroad Company (UP), a Class I rail carrier, to acquire and operate 0.8 miles of rail line owned by Brownsville and Matamoros Bridge Company (B&M), between UP milepost 0.59 (B&M milepost 0.80) to the international border with Mexico located at the center point of B&M's railroad bridge (B&M milepost 0.00). B&M is a common carrier by railroad but does not perform railroad operations itself. Historically, UP has conducted all operations on the line. Upon consummation of the transaction, UP will relocate overhead traffic to a newly constructed line outside the city of Brownsville, Tex. This exemption is subject to standard labor protective conditions.
Railroad Cost Recovery Procedures-Productivity Adjustment
In a decision served on March 4, 2014, we proposed to adopt 1.010 (1.0% per year) as the measure of average change in railroad productivity for the 2008-2012 (5-year) averaging period. This represents an increase of 0.1% from the average for the 2007-2011 period. The Board's March 4, 2014 decision in this proceeding 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 19, 2014.
Railroad Cost of Capital-2013
The Board is instituting a proceeding to determine the railroad industry's cost of capital for 2013. The decision solicits comments on the following issues: (1) The railroads' 2013 current cost of debt capital; (2) the railroads' 2013 current cost of preferred equity capital (if any); (3) the railroads' 2013 cost of common equity capital; and (4) the 2013 capital structure mix of the railroad industry on a market value basis. Comments should focus on the various cost of capital components listed above using the same methodology followed in Railroad Cost of Capital2012, EP 558 (Sub-No. 16) (STB served Aug. 30, 2013).