Notice2026-15897
United States Department of Energy and United States Department of Defense v. Baltimore & Ohio Railroad Company, et al.; United States Department of Energy and United States Department of Defense v. Aberdeen & Rockfish Railroad Company, et al.
Primary source
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Published
August 5, 2026
Issuing agencies
Surface Transportation Board
Full Text
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<title>Federal Register, Volume 91 Issue 149 (Wednesday, August 5, 2026)</title>
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[Federal Register Volume 91, Number 149 (Wednesday, August 5, 2026)]
[Notices]
[Pages 50593-50595]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-15897]
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SURFACE TRANSPORTATION BOARD
[Docket No. NOR 38302S; Docket No. NOR 38376S]
United States Department of Energy and United States Department
of Defense v. Baltimore & Ohio Railroad Company, et al.; United States
Department of Energy and United States Department of Defense v.
Aberdeen & Rockfish Railroad Company, et al.
On December 1, 2025, the United States Department of Energy and the
United States Department of Defense (the Government) and CSX
Transportation, Inc. (CSX) (collectively, Movants), jointly filed a
motion seeking Board approval of a proposed settlement agreement (CSX
Settlement Agreement or Agreement) that would resolve the above-
captioned rate reasonableness disputes as between them only. Movants
also seek a prescription of the rates and rate update methodologies,
and maximum revenue-to-variable cost (R/VC) ratios established for the
commodities and services that are the subjects of the Agreement. At
Movants' request, notice of the CSX Settlement Agreement was served and
published in the Federal Register (91 FR 10179) on March 2, 2026. In
the notice, the Board solicited comments on the Agreement. No comments
were filed. As discussed more fully below, the Board will grant the
motion, approve the Agreement, and prescribe the Agreement's rates and
rate update methodologies and maximum R/VC ratios.
Background
In March 1981, the Government filed these complaints against 21
railroads (the Railroad Defendants) under section 229 of the Staggers
Rail Act of 1980, Public Law 96-448, 94 Stat. 1895. The Government
sought reparations and a rate prescription relating to the nationwide
movement of spent nuclear fuel, other high-level radioactive wastes,
and the empty containers (casks) and buffer and escort cars used for
their movement (together, radioactive materials).
In 1986, the Board's predecessor, the Interstate Commerce
Commission (ICC), found that the Railroad Defendants were engaging in
an unreasonable practice by imposing substantial and unwarranted cost
additives--above and beyond the regular train service rates--in an
effort to avoid transporting these radioactive materials. The ICC
directed the Railroad Defendants to cancel the existing rates and cost
additives, prescribed new rates, and awarded reparations. See
Commonwealth Edison Co. v. Aberdeen & Rockfish R.R., 2 I.C.C.2d 642
(1986). The United States Court of Appeals for the District of Columbia
Circuit set aside and remanded the decision. See Union Pac. R.R. v.
ICC, 867 F.2d 646 (D.C. Cir. 1989). On remand, the ICC ruled that the
movement of these radioactive materials for reprocessing was subject to
the rate cap on recyclables set out in former 49 U.S.C. 10731(e) and
directed the parties to file R/VC evidence to resolve the remaining
reparations and rate prescription issues. See U.S. Dep't of Energy v.
Balt. & Ohio R.R., 10 I.C.C.2d 112 (1994). While judicial review of
that decision was pending, Congress enacted the ICC Termination Act of
1995, Public Law 104-88, 109 Stat. 803, which repealed Sec. 10731 in
its entirety and directed that all proceedings pending under the
repealed statutory provision be terminated.
The Railroad Defendants petitioned the Board to dismiss the
complaints in 1996, and, in 1997, they invited the Government to
explore the possibility of settling the complaints. Discussions
commenced on a nationwide settlement covering all the Railroad
Defendants that might carry radioactive materials. See U.S. Dep't of
Energy v. Balt. & Ohio R.R., NOR 38302S et al. (STB served Nov. 5,
2004). The Government subsequently chose to negotiate only with Union
Pacific Railroad Company (UP), the destination carrier for most of the
movements of radioactive materials that were to be covered by the
nationwide settlement, after the parties concluded that there were
potential antitrust problems in negotiating with the Railroad
Defendants as a group. See id.
In 2004, the Government and UP moved for approval under 49 U.S.C.
10704 of a settlement agreement they had negotiated to resolve these
complaints as between them only. The Board approved that settlement
agreement in 2005 and directed the Government to file quarterly status
reports on the progress of settlement negotiations with other
railroads. See U.S. Dep't of Energy v. Balt. & Ohio R.R., NOR 38302S et
al. (STB served Aug. 2, 2005). In 2012, BNSF Railway Company (BNSF) and
the Government similarly moved for approval of a settlement agreement,
and the Board approved that agreement in a decision served the next
year. See U.S. Dep't of Energy v. Balt. & Ohio R.R., NOR 38302S et al.
(STB served Aug. 26, 2013). Thereafter, in 2017, the Board approved a
settlement agreement between the Government and Norfolk Southern
Railway Company (NSR). See U.S. Dep't of Energy v. Balt. & Ohio R.R.,
NOR 38302S et al. (STB served June 28, 2017). Movants state that the
settlement agreements with UP, BNSF, and NSR successfully resolved all
rate-setting, shipping, and service determinations between those
carriers and the Government.
Movants now jointly request that the Board approve the proposed CSX
Settlement Agreement and prescribe the rate methodology set forth in
it. (Joint Mot. 2, Dec. 1, 2025.) They assert that the agreement
achieves a long-term, system-wide settlement, as between CSX and the
Government, of all rate and service issues related to spent nuclear
fuel and related traffic now moving or likely to move in the future.
(Id. at 12.) Movants note that the UP, BNSF, and NSR settlements have
served as models to the Government for the CSX Settlement Agreement.
(Id. at 9.)
In particular, the CSX Settlement Agreement:
(1) provides for a term of 25 years, commencing on the effective
date of the Board's approval of the CSX Settlement Agreement, and
continues in effect for additional 5-year periods, subject to a 1-year
termination notice requirement. (Id., Ex. A ]] 21, 25; see also id. at
10.) The parties note that the 25-year term with the possibility of
extensions follows the BNSF settlement agreement but differs from the
UP and NSR settlement agreements, which each provide for unlimited
terms, (id. at 9-10);
(2) applies broadly to the nationwide movement on CSX's rail lines
of irradiated spent fuel, parts, and constituents; spent fuel moving
from foreign countries to the United States for disposal; empty casks;
radioactive wastes; and buffer and escort cars. (Id., Ex. A ] 1.A.)
With respect to those movements governed by the rate basis prescribed
in Trainload Rates on Radioactive Materials, E. Railroads, 362 I.C.C.
756 (1980) and 364 I.C.C. 981
[[Page 50594]]
(1981) (Eastern Prescription Case),\1\ this agreement (similar to the
NSR agreement) incorporates a method of determining rates for dedicated
trains which grants CSX an increment over the Eastern rate basis
established in the Eastern Prescription Case to equalize the cost of
shipments nationwide, (Joint Mot. 5, Dec. 1, 2025; see also id. at 10
(describing the CSX lines to which the Eastern rate basis applies));
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\1\ In that proceeding, maximum R/VC ratios were prescribed on a
commodity-by commodity basis at various minimum weights as local and
proportional rate factors. The prescription was applicable within
the East but primarily was to be used for through movements destined
beyond the lines of the rail carriers covered by the prescription.
The ICC's 1980 decision was affirmed in Consolidated Rail Corp. v.
ICC, 646 F.2d 642 (D.C. Cir. 1981), cert. denied, 454 U.S. 1047
(1981).
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(3) establishes the parties' agreement that the movement of these
radioactive materials constitutes common carrier service; addresses the
elements of service required of CSX; adopts guidelines for safe
handling and security; and obligates CSX to provide, as needed, ``extra
services'' as described in the agreement, at the rates agreed upon,
(id. at 6-7, 11, 13; see also id., Ex. A ]] 4, 6.A, 6.B, & 10);
(4) adopts a rate methodology to: (a) apply to all future movements
of these radioactive materials in common carrier service. The
methodology adopts maximum R/VC markups of CSX's most current system-
average variable unit costs computed under the Board's Uniform Rail
Costing System (URCS). (Id. at 6; id., Ex. A ] 6.) The Government
agrees to limit the application of the Eastern rate basis to the former
lines of those railroads specifically listed in the Eastern
Prescription Case, (id. at 10-11; see also id., Ex. A ] 6); \2\ and (b)
compensate CSX for ``extra services'' and dedicated train service, when
requested by the Government, and procedures to calculate ``equitable
compensation'' for emergency-related costs that CSX may incur (Joint
Mot. 6-7, 13, Dec. 1, 2025; see also id., Ex. A ]] 6.B & 6.C);
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\2\ The parties note, however, that the Eastern rate will apply
to the applicable lines of Pan Am Railways which were acquired by,
and became part of, the CSX network in 2022. (Id. at 10); see also
CSX Corp.--Control & Merger--Pan Am Systems, Inc., FD 36472 et al.
(STB served Apr. 14, 2022).
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(5) adopts a procedure to update compensation for rates and ``extra
services'' when the Board ``issues new URCS and make-whole factors'' to
reflect changes in CSX's system-average unit costs, (id., Ex. A ] 7);
(6) extinguishes CSX's liability (and that of its predecessors and
subsidiaries) for reparations in all matters arising out of these
proceedings, (id., Ex. A ] 23; see also id. at 17);
(7) adopts alternative dispute resolution procedures, with recourse
to the Board if those procedures do not resolve a dispute and
mechanisms to renegotiate portions of the agreement in a limited number
of circumstances or if changed circumstances make further adherence to
the terms of the agreement ``grossly inequitable'' to either party,
(id. at 13-14; see also id., Ex. A ]] 15 & 25); and
(8) incorporates language regarding indemnification pursuant to the
Price-Anderson Nuclear Industries Indemnity Act, 42 U.S.C. 2210 (Price
Anderson Act). Specifically, the CSX Settlement Agreement states that,
``as set forth in [the] Price Anderson [Act], such public liability
(including any clean-up costs and any loss of use to the extent such
damages are permitted by applicable law) shall extend to any CSX-owned
property (including but not limited to CSX rights-of-way, yards, rail
lines, tracks, locomotives, rolling stock cars, equipment, vehicles,
and buildings) (i) that is damaged by a nuclear incident covered by
[the] Price Anderson [Act], and (ii) for which atomic/nuclear insurance
cannot be obtained or would not be expected.'' (Joint Mot. 12, Dec. 1,
2025; see also id., Ex. A ] 6.E.)
Movants state that the Agreement adopts the rate structure and
principal terms of the Government's agreements with UP, BNSF, and NSR,
while improving upon those documents by clarifying or elaborating upon
definitions and accepted practices and making explicit certain legal
standards applicable regardless of their inclusion in the Agreement.
(Joint Mot. 9, Dec. 1, 2025.) The Agreement, according to Movants,
differs from those with UP and BNSF in that part of CSX's routes are
covered by the Eastern Prescription Case, as was the case for NSR. (Id.
at 6.) Movants explain that the present settlement essentially broadens
the Eastern Prescription Case model to include radioactive shipments of
varying weights in varying types of service and equipment with the
object of providing for CSX rates and services into the long-term
future. (Id. at 18.)
CSX concedes, for purposes of the joint motion and the Agreement
only, ``that the Board has jurisdiction to approve the Settlement
Agreement and to prescribe rates that encompass naval, commercial, and
foreign research reactor spent fuel, waste shipments, and other related
shipments made by or for the Government.'' (Joint Mot. 15, Dec. 1,
2025.) This concession, CSX asserts, ``is in keeping with the holding
in'' Union Pacific Railroad v. ICC, 867 F.2d at 649, ``that a
concession of market dominance removes that issue from the
proceedings.'' (Joint Mot. 15, Dec. 1, 2025.)
Movants state that the Agreement will be implemented by CSX
tendering rate quotations to the Government pursuant to 49 U.S.C.
10721. (Joint Mot. 16, Dec. 1, 2025.) Thus, they assert that no
contract rates are involved here. (Id.) Movants further state that all
the rates under the proposed methodologies that the Board is being
asked to approve will be common carrier rates, which are fully subject
to Board oversight for rate reasonableness. (Id.)
Movants also note that the Agreement does not purport to resolve
any issues for the remaining defendants. (Id. at 14.) They further note
that, as the Board determined with respect to the Government's
settlements with UP, BNSF, and NSR, the terms and obligations of the
Government's settlement with CSX will be binding only between the
Government and CSX and will not have precedential effect regarding the
reasonableness of other railroad parties' rates or their common carrier
obligations. (Id.)
Movants contend that the Agreement is in their interests and in the
public interest (id.) and that it is consistent with the Rail
Transportation Policy (RTP), 49 U.S.C. 10101, asserting that it: allows
to the maximum extent possible for competition and the demand for
service to establish reasonable rates, Sec. 10101(1); minimizes
federal regulatory control, Sec. 10101(2); promotes an efficient rail
transportation system, Sec. 10101(3); ensures the development and
continuation of a sound rail transportation system, Sec. 10101(4); and
fosters sound economic conditions in transportation, Sec. 10101(5)
(Joint Mot. 15, Dec. 1, 2025).
Movants also point out that the Agreement affirms the Board's
policy favoring the private settlement of disputes. (Id. at 16.)
Movants assert that the ``Agreement also serves the public interest by
not prejudicing the Government's right of action against any remaining
defendant.'' (Joint Mot. 17, Dec. 1, 2025.) In this regard, Movants
note that, while some of the movements covered by the Settlement
Agreement are and will be local movements on CSX, the majority of the
movements under the Agreement are expected to be interline movements
involving two or more rail carriers. (Id. at 16.) Citing Ford Motor
Company v. ICC, 714 F.2d 1157 (D.C. Cir. 1983) and U.S. Department of
Energy v. Aberdeen & Rockfish Railroad, NOR 38302S et al., slip op. at
5-6 (STB served Aug. 2, 2005), they assert that the Board, like the ICC
before it, has jurisdiction to approve settlements for rail carriers
participating
[[Page 50595]]
in through rates and services and may, ``[i]n cases involving a
challenge to a through rate . . . permit the dismissal of one party
without jeopardizing the complainant's right to proceed against the
remaining joint defendants and to forego reparations from the settling
carrier.'' (Joint Mot. 16, Dec. 1, 2025.)
Movants request that the Board: (1) prescribe the rate
methodologies and maximum R/VC ratios that have been agreed to for the
radioactive materials and rail services that are the subject of the
agreement; and (2) dismiss CSX as a defendant in these proceedings,
extinguish CSX's liability for reparations in all matters arising out
of these proceedings, and relieve CSX from any further requirement to
participate in these proceedings (except in response to a properly
issued subpoena under the Board's rules). (Joint Mot. 3-4, 19, Dec. 1,
2025.) Furthermore, the Government requests that the Board retain
jurisdiction over these proceedings and continue to hold them in
abeyance pending further settlement negotiations. (Id. at 4.)
Discussion and Conclusions
As the Movants note, the CSX Settlement Agreement is substantially
similar to the UP Agreement or the subsequent agreements the agency
approved involving BNSF and NSR. (See Joint Mot. 3, Dec. 1, 2025.) Like
those agreements, the CSX Settlement Agreement concerns rate and
service obligations that apply to the Government's movement of
radioactive materials over the lines of a major Class I rail carrier
and resolves decades-old, difficult, and complex issues related to
those obligations. It appears to satisfy fully Movants' basic needs as
they apply to the movement of radioactive materials by rail, giving
them the flexibility they seek, the ability to accommodate changing
needs and technologies, and the opportunity to move to a more
collaborative business partnership with respect to the transportation
of traffic covered by the Agreement.
Wherever possible, the Board's longstanding policy is to encourage
the private resolution of disputes through voluntary negotiations among
all interested parties. The CSX Settlement Agreement is the result of
arm's-length negotiations over an extended period of time. Under the
circumstances, there is no reason for the Board to withhold its
approval. Indeed, consistent with the RTP, the Agreement promotes 49
U.S.C. 10101 by minimizing the need for Federal regulatory control,
promoting an efficient rail transportation system, helping to ensure
the development and continuation of a sound rail transportation system,
and fostering sound economic conditions in transportation. Sec. Sec.
10101(2)-(5). Other aspects of the RTP would not be adversely affected.
Consistent with Movants' requests, the Board: (1) approves the
proposed Agreement; (2) prescribes the Agreement's rate update
methodologies, maximum R/VC ratios, and rates; (3) dismisses CSX as a
defendant in these proceedings; (4) extinguishes all of CSX's liability
(including that of its predecessors and subsidiaries) for reparations;
and (5) relieves CSX from any further requirement to participate in
these proceedings, except in response to a properly issued subpoena
under the Board's rules.
Finally, the March 2, 2026 Federal Register notice required the
Government to file a list of remaining defendants in these proceedings
to inform the Board of the status. The Government's April 16, 2026
letter provided that information and indicated that there were a number
of remaining railroads with whom the Government had yet to reach a
transportation agreement. The Government stated that it intended to
reach out, on an individual basis, to a discrete number of railroads to
explore the possibility of additional agreements related to these
proceedings. (Gov't Ltr. 1, Apr. 16, 2026; see id., Attach. 1 & 2.)
Accordingly, the Board will keep these dockets open consistent with the
Government's request that the proceedings continue to be held in
abeyance pending further settlement negotiations.
It is ordered:
1. The Agreement is approved.
2. The rate update methodologies and rates set forth in the
Agreement are prescribed as the maximum reasonable rates as between the
signatories.
3. CSX's liability (including that of its predecessors and
subsidiaries) for reparations is extinguished.
4. CSX is dismissed as a party to these proceedings and relieved
from any further requirement to participate in these proceedings,
except in response to a properly issued subpoena under the Board's
rules.
5. Notice will be published in the Federal Register.
6. This decision is effective on August 5, 2026.
Decided: July 31, 2026.
By the Board, Board Members Fuchs, Hedlund, Kloster, and
Schultz.
Zantori Dickerson,
Clearance Clerk.
[FR Doc. 2026-15897 Filed 8-4-26; 8:45 am]
BILLING CODE 4915-01-P
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</html>Indexed from Federal Register on August 5, 2026.
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