03-15505. Railroad Cost of Capital-2002

AGENCY:

Surface Transportation Board, DOT.

ACTION:

Notice of decision.

SUMMARY:

On June 11, 2003 the Board served a decision to update its computation of the railroad industry's cost of capital for 2002. The composite after-tax cost of capital rate for 2002 is found to be 9.8%, based on a current cost of debt of 6.0%; a cost of common equity capital of 12.6%; a cost of preferred equity capital of 6.3%; and a capital structure mix comprised of 41.2% debt, 56.7% common equity, and 2.1% preferred equity capital. The cost of capital finding made in this proceeding will be used in a variety of Board proceedings.

EFFECTIVE DATE:

This action is effective June 11, 2003.

FOR FURTHER INFORMATION CONTACT:

Leonard J. Blistein, [phone]. (Federal Information Relay Service (FIRS) for the hearing impaired: 1 [phone].)

SUPPLEMENTARY INFORMATION:

The cost of capital finding in this decision may be used for a variety of regulatory purposes. The Board's decision is posted on the Board's Web site, http://www.stb.dot.gov. In addition, copies of the decision may be purchased from Da-2-Da Legal Copy Service by calling 202-293-7776 (assistance for the hearing impaired is available through FIRS at 1-800-877-8339) or visiting Suite 405, 1925 K Street, NW., Washington, DC 20006.

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: June 11, 2003.

By the Board, Chairman Nober.

Vernon A. Williams,

Secretary.