MARKETS

Utility sues Norfolk Southern for contract breach

POWER company South Mississippi Electric Power Association has filed suit against Norfolk Souther...

Donna Schmidt
Utility sues Norfolk Southern for contract breach

The company said earlier this week that NS was the only railroad company which delivered coal from the Appalachian region to its main generation station, the Morrow plant in Purvis, Mississippi, making SMEPA a “captive shipper”. It did not indicate which Appalachian mines the coal was sourced from.

“NS exerts sole control over the rates, rules and other terms of transporting coal to Morrow and has been the sole carrier of fuel since the plant began operations in 1978,” the power company said, noting that every contract renewal carried with it a price increase of between 60% and 80%.

The companies’ most recent contract expired the last day of 2010.

The utility also claims NS had delivery shortfalls last year totaling 130,000 tons of coal.

"Our rail costs have continued to rise significantly while the service we receive has steadily deteriorated," SMEPA spokesperson Kurt Brautigam said.

“NS is one of the most profitable railroads in the country, and it is troubling that we have received no reasonable or substantive response to our concerns. At this point, unfortunately, we have no other recourse than to litigate to seek relief from the monopolistic abuse NS has subjected us to.”

SMEPA filed its suit December 29 in the US District Court in south Mississippi, though case documents are not public.

The Associated Press quoted Brautigam as saying that the lawsuit is seeking $US17 million. Court documents reportedly reflect $34 million, but Brautigam said he did not know the reason behind the discrepancy.

South Mississippi Electric provides power for 11 distribution cooperatives which deliver not‐for‐profit retail electric services to 406,000 homes and businesses throughout most of Mississippi.

NS has not issued public comment on the suit.

TOPICS:

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining Monthly Intelligence team.

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining Monthly Intelligence team.

editions

Mining Magazine Intelligence Exploration Report 2024 (feat. Opaxe data)

A comprehensive review of exploration trends and technologies, highlighting the best intercepts and discoveries and the latest initial resource estimates.

editions

Mining Magazine Intelligence Future Fleets Report 2024

The report paints a picture of the equipment landscape and includes detailed profiles of mines that are employing these fleets

editions

Mining Magazine Intelligence Digitalisation Report 2023

An in-depth review of operations that use digitalisation technology to drive improvements across all areas of mining production

editions

Mining Magazine Intelligence Automation Report 2023

An in-depth review of operations using autonomous solutions in every region and sector, including analysis of the factors driving investment decisions