94-8350. Railroad Cost Recovery Procedures-Productivity Adjustment

[Federal Register Volume 59, Number 67 (Thursday, April 7, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-8350]


[[Page Unknown]]

[Federal Register: April 7, 1994]


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INTERSTATE COMMERCE COMMISSION
[Ex Parte No. 290 (Sub No. 4)]

 

Railroad Cost Recovery Procedures-Productivity Adjustment

AGENCY: Interstate Commerce Commission.

ACTION: Continuance of advance notice of rail productivity growth 
estimate.

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SUMMARY: In Productivity Adjustment-Implementation, 9 I.C.C.2d 1072 
(1993), the Interstate Commerce Commission (ICC) prescribed the use of 
a 5-year moving average for measuring changes in railroad productivity 
used in calculating the Rail Cost Adjustment Factor (RCAF). Annually 
this method produces a productivity growth estimate from an output/
input index. The annual estimates are used, in turn, to generate a 
geometric mean over a moving five year time span. The resulting mean 
productivity factor is then used to adjust the RCAF. Thus, the RCAF 
(adjusted) (to reflect changes in productivity) is the product of both 
the productivity factor and the quarterly output/input index. Railroad 
rates linked to the RCAF cannot exceed the level of the RCAF (adjusted) 
in a given quarter if they are to retain their statutory immunity to 
challenge.

EFFECTIVE DATE: This decision will be effective on April 5, 1994.

FOR FURTHER INFORMATION CONTACT: Jennifer E. Gladieux or [phone] 
Thomas A. Schmitz [phone]; TDD for hearing impaired: (202) 927-
5721.

SUPPLEMENTARY INFORMATION: In disseminating the annual productivity 
growth estimate and the new 5-year average, the ICC has traditionally 
published its calculations in a separate Ex Parte No. 290 (Sub-No. 4) 
decision in advance of the effective date. In a decision served in this 
docket on December 3, 1993, we proposed to eliminate that notice and 
requested comments on its elimination would be detrimental to the rail 
cost adjustment process.
    Our proposal to streamline the process by eliminating an 
administrative step has been opposed by the parties. Concern over 
mathematical errors appears to be the major issue of commentors. The 
Western Coal Traffic League (WCTL) wishes to continue reviewing and 
verifying the productivity factor in advance of its effectiveness.
    Additionally, both the Association of American Railroads (AAR) and 
WCTL urge the Commission to continue advance publication of the 
productivity growth estimate and the new 5-year average. In their view, 
this procedure encourages public dissemination and review of these 
calculations, thereby affording interested parties an opportunity to 
verify the data inputs and to detect computational problems before the 
productivity adjustments is applied to the RCAF. Both contend the 
burden is minimal, and the current advance notice procedure prevents 
major expenditures to correct the RCAF if the preliminary calculations 
require modification.
    After consideration of the comments, we will continue to give 
timely advance notice of the yearly productivity estimate in this 
proceeding which will be published in the Federal Register no later 
than November 15 in the year preceding its effective date. This will 
give the public ample time to review the calculations before the 
effective date.
    This action will not significantly affect either the quality of the 
human environment or energy conservation.

    Decided: March 29, 1994.

    By the Commission, Chairman McDonald, Vice Chairman Phillips, 
Commissioners Simmons and Philbin.
Sidney L. Strickland, Jr.,
Secretary.
[FR Doc. 94-8350 Filed 4-6-94; 8:45 am]
BILLING CODE 7035-01-P