98-19286. Railroad Cost of Capital1997

[Federal Register Volume 63, Number 138 (Monday, July 20, 1998)]
[Notices]
[Page 38878]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-19286]


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DEPARTMENT OF TRANSPORTATION

Surface Transportation Board
[STB Ex Parte No. 558 (Sub-No. 1)]


Railroad Cost of Capital--1997

AGENCY: Surface Transportation Board.

ACTION: Notice of decision.

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SUMMARY: On July 20, 1998, the Board served a decision to update its 
estimate of the railroad industry's cost of capital for 1997. The 
composite cost of capital rate for 1997 is found to be 11.8%, based on 
a current cost of debt of 7.2%; a cost of common equity capital of 
13.8%; a cost of preferred equity capital of 6.1%; and a 29.67% debt, 
70.28% common equity, 0.05% preferred equity capital structure mix. The 
cost of capital finding made in this proceeding will be used in a 
variety of Board proceedings.

EFFECTIVE DATE: This action is effective July 9, 1998.

FOR FURTHER INFORMATION CONTACT: Leonard J. Blistein, [phone]. 
[TDD for the hearing impaired: [phone].]

SUPPLEMENTARY INFORMATION: The cost of capital finding in this decision 
shall be used to evaluate the adequacy of railroad revenues for 1997 
under the standards and procedures promulgated in Standards for 
Railroad Revenue Adequacy, 3 I.C.C.2d 261 (1986). This finding may also 
be used in other Board proceedings involving, for example, the 
prescription of maximum reasonable rate levels and proposed 
abandonments of rail lines. Additional information is contained in the 
Board's decision. To obtain a copy of the full decision, write to, 
call, or pick up in person from: DC NEWS & DATA, INC., Room 210, 1925 K 
Street, N.W., Washington, DC 20423. Telephone: [phone]. 
[Assistance for the hearing impaired is available through TDD services 
[phone].] The decision is also available on the Board's internet 
site at 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: July 9, 1998.

    By the Board, Chairman Morgan and Vice Chairman Owen.
Vernon A. Williams,
Secretary.
[FR Doc. 98-19286 Filed 7-17-98; 8:45 am]
BILLING CODE 4915-00-P