America needs legislation to stop railroads from hijacking electric consumers.

America’s monopoly railroads, once an engine of economic growth and symbol of the indomitable American spirit, have become a drag on our national economy and an impediment to your co-op’s ability to deliver affordable and reliable electric service.

In 1980 Congress deregulated the railroads, reasoning that – free of burdensome regulation and exposed to market forces – the industry would reform itself, becoming a more competitive and efficient transportation option. In the last 25 years, however, free of any meaningful oversight, the industry has consolidated rather than reformed, becoming both less competitive and less efficient. Today, a handful of powerful railroads are free to impose unreasonable rates and provide inferior service to customers who, by virtue of geography and anti-competitive practices, have no alternate service provider. These customers are known as “captive ”shippers.

Your local co-op or the power plant it depends on for electricity may be a captive shipper. Imagine having to take a toll road to work each day and having no idea what the toll will be or whether the highway is passable. That is the situation in which electric utilities find themselves. Having negotiated on the open market for fuel and material to fire and maintain their generators, co-ops are held hostage by monopoly railroads for delivery.

These unregulated, sole-service rail barons are free to set a tariff one, two, or three times the competitive market rate. To challenge the tariff, a rate case must be opened before the Surface Transportation Board, a legal proceeding that can cost more than $3 million. The cost is high and the odds are bad – every captive shipper rate case has been decided in favor of the railroads.

So the co-op pays, and still there is no guarantee that the goods will arrive on time. Freight shipments from the Powder River Basin, a major coal-exporting region of Wyoming, have been brought to a crashing halt by the erosion of poorly maintained rail bed and track. A few co-ops have even been forced to purchase coal from overseas markets. Imagine, our nation’s most abundant and affordable energy resource chocked off by avarice and greed.

It may be that the federal government wants to subsidize American railroads at the expense of electric consumers. The rail industry has certainly done an admirable job of lobbying its position, pleading poverty to legislators and regulators, while promoting its fiscal health and solid financial future to Wall Street analysts and rating agencies – in effect, having its cake and eating it too. If so, then Congress should be on the record endorsing such a backdoor transportation tax.

America’s electric cooperatives support two bills currently before Congress: H.R. 3318–The Railroad Antitrust and Competition Act of 2005, and S. 919–Railroad Competition Act of 2005. I urge every electric co-op member to work with their co-op to move these bills forward. Without the passage of consumer-friendly rail legislation, three things are certain: Rail service will continue to decline, tariffs will increase, and your electric co-op’s costs will rise.

Glenn English is chief executive officer of the National Rural Electric Cooperative Association. NRECA is the national service organization that represents the nation’s more than 900 private, nonprofit, consumer-owned electric co-ops that provide electric service to over 39 million people in 47 states.