Review of the General Purpose Costing System; Supplement
Through this supplemental notice of proposed rulemaking (Supplemental NPR), the Surface Transportation Board (Board) is revising its proposal to eliminate the ``make-whole adjustment'' that is currently applied as part of our general purpose costing system, the Uniform Railroad Costing System (URCS). The notice of proposed rulemaking (NPR) in this proceeding, issued on February 4, 2013, explained that when disaggregating data and calculating system-average unit costs in Phase II, URCS does not fully take into account the economies of scale realized from larger shipment sizes, necessitating an adjustment in Phase III. This subsequent adjustment in Phase III, referred to as the make-whole adjustment, produces a step function and does not appropriately reflect operating costs and economies of scale. To better address this problem and related issues, the Board is now proposing to modify certain inputs into Phase II of URCS and to modify certain cost calculations in Phase III of URCS in order to eliminate the make-whole adjustment. The Board is also proposing certain other related changes to URCS, including proposals for locomotive unit-miles (LUM) and train miles allocations, which would result in more appropriate rail movement costs.