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BNSF and coal exporter reach settlement

Companies ask STB to delay addressing their service dispute

BNSF and Navajo Transition Energy Co. have reached a settlement agreement regarding coal shipments. (Photo: Jim Allen/FreightWaves)

Western U.S. Class I railroad BNSF and coal producer Navajo Transitional Energy Co. (NTEC) have reached a settlement on NTEC’s claims it needs more service from BNSF to export coal.

They told the Surface Transportation Board in a Thursday filing to postpone further action on the dispute until Jan. 8, 2024, which is when they expect the settlement to be concluded.

NTEC and BNSF (NYSE: BRK-B) “have recently reached a settlement agreement to resolve the matter,” the two said in the filing. They didn’t specify what the settlement terms were.

NTEC had asked STB in April to enact an emergency service order against the railroad because the company claimed that BNSF is not meeting its end of the bargain to ship the volumes of coal that NTEC wants shipped.

NTEC was seeking to transport coal from its Spring Creek mine in Big Horn County, Montana, to Westshore Terminal at Roberts Bank in British Columbia. The company said then that it needed  BNSF to guarantee that it would provide service so that NTEC’s customers can have sufficient time to arrange for the ocean transport of the coal once it reached Westshore.

The company, which has offices in Broomfield, Colorado, and Farmington, New Mexico, and is also an electric utility, asked STB to rule that BNSF breached its obligation to provide adequate common carrier service and that it failed to establish and provide safe and adequate service, according to its April 14 filing. The coal producer also asked STB to define the scope of BNSF’s common carrier obligation as well as provide relief.

Indeed, a larger question that arose from the proceeding was how a Class I rail carrier as well as STB should define adequate service under the common carrier obligation. Per federal regulations, the common carrier obligation binds railroads to carry freight, provided that the tendered agreement has reasonable terms and conditions.

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Joanna Marsh

Joanna is a Washington, DC-based writer covering the freight railroad industry. She has worked for Argus Media as a contributing reporter for Argus Rail Business and as a market reporter for Argus Coal Daily.