The EPA Can Reject California Rules for Railroads

Freight train cars sit in a Union Pacific rail yard
Union Pacific rail yard
(AP Photo/Ashley Landis)

This story is from Real Clear Markets.
Click here to read the full story. Below is a condensed summary.

The Environmental Protection Agency (EPA) will hold an important hearing on March 20th to consider a request from the California Air Resources Board (CARB) to fundamentally distort the regulation of economically critical railroads and their locomotive fleet. The EPA has a unique opportunity to stand for the rule of law while still advancing its mission for a cleaner environment. Decisive action in defending its regulatory lane and rejecting the overtures of California, which is seeking to obliterate highly efficient locomotives – responsible for just 0.6 percent of U.S. greenhouse emissions – would also protect millions of American businesses and consumers across the country.

At issue is a waiver the state of California must receive to implement a sweeping measure it recently passed. The rule says that railroads must prematurely start retiring their existing locomotive fleet in 2030, and that after 2035 railroads may no longer purchase new locomotives for use in California unless they are “zero-emission.”  Yet no such locomotive is viable today and even the most optimistic forecasts say there is no way railroads could possibly replace thousands of locomotives in less than eleven years. This is to say nothing about very real grid capacity concerns.

The EPA has a choice. We should all hope it makes the right one, favoring solutions that protect the economy while advancing our environmental goals.

Richmond Pacific’s Barbara O’Neill Retires

Barbara O’Neill, a longtime contributor to the short-line industry retired on Dec. 31.  For more than 18 years, O’Neill was vice president of marketing and sales for Richmond Pacific Railroad Corp.  Her responsibilities included market development, commercial agreements, planning, forecasting, customer service and Class I commercial interfaces. 

Prior to joining the short line, O’Neill served three Class Is for more than 20 years primarily in sales and marketing positions: the Southern Pacific and Union Pacific railroads, and CSX.

Late last year, O’Neill, 69, reached the point she was ready to retire after considering it for a while. She wanted to spend more time with family and friends.

 “It was a fun job. The short-line world is more fun since you are close to customers — they’re right there, a few miles away,” says O’Neill. “We can switch cars for them three times in one day, or on a weekend, if that’s what a customer wants. We make it easier for customers and offer a very friendly environment.”

For the full story about Barbara O’Neill’s retirement, read the article at Progressive Railroading.

NEW CALIFORNIA UTILITY CONNECTION TAX WILL HURT RAILROADS AS WELL AS INDIVIDUALS

This tax (see below) will affect both individuals and businesses.  If you are a California railroad, RR museum or switching operator, consider: Every separate utility connection you have (meaning every protected grade crossing) will incur the “connection tax.”  Tell your state legislators to fix this mess.


From the Solar Rights Alliance Newsletter — November 28, 2023 

Why state lawmakers must pass a bill to repeal the Utility Tax
Recap: Proposed Utility Tax will increase bills on millions of people and undermine rooftop solar

Last year, state legislators passed a law requiring all ratepayers to pay a Utility Tax in addition to per kilowatt/hour charges. The utilities and their allies are lobbying for the highest Utility Tax in the nation—between $30 and $70 per month just for being hooked up to the utility. Even a $30 per month Utility Tax will increase bills on millions of households that do not use much electricity. This includes solar users, as well as those without solar who live in apartments, condos, and small homes. Learn more

Lawmakers are starting to speak out against the Utility Tax

In late October, 22 state legislators sent a strongly-worded letter to the CA Public Utilities Commission (CPUC) criticizing the Utility Tax. Lawmakers have also begun speaking out in other ways, like this article (The headline says it all: the Utility Tax is a “mistake that will raise your rates”).

The public does not want a Utility Tax

These actions came on the heels of months of pressure from constituents. That includes scores of people showing up in person to legislators’ town hall meetings to press them on repealing the Utility Tax.

In addition, some lawmakers were moved by evidence showing that even a $30/month Utility Tax would increase electricity bills on millions of households that don’t use a lot of energy—this includes solar users and those who simply live in apartments, condos, and small homes.

The CPUC cannot be trusted with the Utility Tax

It is good that some legislators are publicly speaking out against the Utility Tax. The lawmakers who signed the letter deserve credit. However, the letter addresses the California Public Utilities Commission. And the CPUC will not solve this problem—their actions clearly show that they almost always side with the utilities.

The Utility Tax is the Legislature’s problem to fix—through legislation

The Legislature created the Utility Tax. It is their responsibility to fix it. That means repealing or amending the Utility Tax provision of AB 205 (Section 10) by June 2024. The CPUC is scheduled to approve the Utility Tax in July. That means the legislature must repeal the Utility Tax before then to avert this disaster.

The first step to repeal the Utility Tax is for a legislator to introduce a bill when they get back together in January. To our knowledge, legislators have not yet introduced a bill. Nor has a legislator announced an intention to introduce a bill. So legislators have some work to do.

There is no excuse for inaction

We suspect some state legislators will say that a bill to repeal the Utility Tax may not get enough votes to pass. Or that it is more “realistic” to “work something out” with the CPUC.

Our view: The CPUC’s track record makes it clear that things won’t end well in their hands. Legislators have only two choices. They can pull out all the stops to pass a bill that repeals the Utility Tax they created. Or they can do nothing and face the blame when the the Utility Tax raises electricity bills on millions of their constituents.