Fortnightly Magazine - January 15 1998

Railroad Congestion Drives Up Energy Prices

THE RECENT SLOW-DOWN IN RAIL SHIPMENTS OF WESTERN coal has begun to claim victims in the electric utility industry. One of the largest in recent years, the current fuel "shortage" has hit big investor-owned utilities, small municipalities and co-ops. Increased alternative fuel and replacement purchased power cost utilities more than $150 million in 1997.

Union Pacific rail system is the source of most of the slow-down in western coal deliveries. As the company works to integrate recently acquired Southern Pacific railroad into its operations, it has encountered many difficulties.

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