E8-8386. Railroad Cost-of-Capital-2006

AGENCY:

Surface Transportation Board.

ACTION:

Notice of decision.

SUMMARY:

On April 15, 2008, the Board served a decision to update its computation of the railroad industry's cost-of-capital for 2006. The composite after-tax cost-of-capital rate for 2006 is found to be 9.94%, based on a current cost-of-debt of 5.97%; a cost of common equity capital of 11.13%; and a capital structure mix comprised of 23.05% debt and 76.95% common equity. The cost-of-capital finding made in this proceeding will be used in a variety of Board proceedings.

EFFECTIVE DATE:

This action is effective April 15, 2008.

FOR FURTHER INFORMATION CONTACT:

Pedro Ramirez, 202-245-0333. [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, which is available on our Web site http://www.stb.dot.gov.

Environmental and Energy Considerations

This action will not significantly affect either the quality of the human environment or the conservation of energy resources.

Regulatory Flexibility Analysis

Pursuant to 5 U.S.C. 605(b), we conclude that our action in this proceeding will not have a significant economic impact on a substantial number of small entities. The purpose and effect of this action are to update the annual railroad industry cost-of-capital finding by the Board. No new reporting or other regulatory requirements are imposed, directly or indirectly, on small entities.

Authority: 49 U.S.C. 10704(a).

Decided: April 14, 2008.

By the Board, Chairman Nottingham, Vice Chairman Mulvey, and Commissioner Buttrey.

Anne K. Quinlan,

Acting Secretary.