W. Va. Code R. § 150-12-5

Current through Register Vol. XLI, No. 38, September 20, 2024

Section 150-12-5 - Rules Relating to Determination of Market Dominance in Commission Proceedings Market Dominance Guidelines

5.1. Intramodal competition.

a. Intramodal competition refers to competition between two (2) or more railroads transporting the same commodity between the same origin and destination. A shipper has rail alternatives when, for a given purpose, he can be served by more than one railroad or combination of different railroads. The degree to which these alternatives compete with one another depends on such factors as:

1. the number of rail alternatives;

2. the feasibility of each alternative as evidenced by:

A. physical characteristics of the route associated with each alternative that are indicative of the feasibility of using that alternative for the traffic in question (e.g., circuity, track conditions, etc.); and

B. the direct access of both the shipper and the receiver to each of the rail alternatives as evidenced by individual rail sidings, neutral terminal companies or reciprocal switching; or if direct access is not available, then the feasibility of using local trucking to transport the commodity to or from terminals;

3. the transportation costs associated with each alternative (to determine if actual use of alternatives is due to excessive rates charged by the rail carrier in question);

4. collective rate making among the railroads in question as evidenced by rate bureau involvement; and

5. evidence of substantial rail related investment or long term supply contracts (more weight will be given these contracts if made prior to October 1, 1980).

b. These factors should be considered in connection with the preparation and submission of evidence pertaining to the presence or absence of effective intramodal competition. This list is neither exhaustive nor mandatory but provides a general indication of the type of evidence that would be appropriate.

5.2. Intermodal competition.

a. Intermodal competition refers to competition between rail carriers and other modes for the transportation of a particular product between the same origin and destination. Motor and water carriage are the main sources of intermodal competition for railroads.

1. Water carriage. -- Water carriage is restricted to certain geographic areas and is generally used for commodities moving in bulk. The evidence required to demonstrate effective competition between rail and water alternatives is in many respects similar to that required for intramodal competition among rail carriers. Parties in a rate case should provide evidence along the following lines:

A. the number of alternatives involving different carriers;

B. the feasibility of each alternative as evidenced by:

i. pertinent physical characteristics, for the product in question, of the transportation of routing associated with each alternative;

ii. the access of both shipper and receiver to each alternative; and

C. the transportation costs of each alternative.

D. The factors set forth in this rule are not meant to be exhaustive.

2. Motor carriage. -- Unlike rail or water alternatives, the availability of many motor carrier alternatives for transportation services between two points can, in most instances, be taken for granted. Therefore, the feasibility of using motor carriage as an alternative to rail may be viewed as depending exclusively on the nature of the product and the needs of the shipper or receiver. Effective competition from motor carriage may be deduced from the following types of evidence:

A. the amount of the product in question that is transported by motor carrier where rail alternatives are available;

B. the amount of the product that is transported by motor carrier under transportation circumstances (e.g., shipment size and distance) similar to rail;

C. physical characteristics of the product in question that may preclude transportation by motor carrier;

D. the transportation costs of the rail and motor carrier alternatives; and

E. Other types of evidence the feasibility or nonfeasibility of motor carriage as an alternative to rail will also be considered.

5.3. Geographic competition.

a. Geographic competition may be described as a restraint on rail pricing stemming from a shipper's or receiver's ability to get the product to which the rate applies from another source, or ship it to another destination. Because shippers and receivers can obtain the product from an alternate source and ship it to another destination, the railroad must compete with the railroad serving the alternate source or destination. Geographic competition among rail carriers is usually present where transportation costs account for a substantial portion of the delivered price of the subject commodity. To establish the potential for geographic competition, evidence should be submitted concerning the following:

1. the number of alternative geographical sources of supply or alternative destinations available to the shipper or receiver for the product in question;

2. the number of these alternative sources or destinations served by different carriers; and

3. that the product available from each source or required by each destination is the same.

b. Evidence presented under Rule 5.3(a) is sufficient only to indicate whether effective geographic competition is possible. To determine whether effective geographic competition actually exists, evidence showing the feasibility of each source or destination and the likelihood of competition should be presented. This evidence may be as follows:

1. the distance associated with each alternative source or destination;

2. relevant physical characteristics of the route associated with each alternative;

3. the access of the shipper or receiver to each transportation alternative;

4. the capacity of each source to supply the product in question or the capacity of each destination to absorb the product in question;

5. the transportation costs associated with each alternative;

6. collective ratemaking among the railroads in question as evidenced by rate bureaus; and

7. evidence of substantial rail related investment or long term supply contracts (more weight will be given these contracts if made prior to October 1, 1980).

c. It is to be emphasized that these guidelines are not intended to encompass all pertinent evidence.

5.4. Product competition.

a. Product competition occurs when a receiver or shipper can use a substitute(s) for the product covered by the rail rate. In that case, the railroad must compete with the railroad or other mode which carries that other product, and again, must keep its rate competetive if it wants the traffic. Evidence as to the existence of product competition should reflect the availability to the shipper or receiver of feasible substitutes and show that these substitutes can be obtained through the use of other carriers or modes without substantially greater cost, transportation or otherwise. To demonstrate whether a feasible substitute exists, the following types of evidence, among others, may be submitted:

1. use of a substitute product(s) by the receiver or shipper in question or by others with similar needs and under similar conditions;

2. the prices of the substitute product(s) relative to the product in question;

3. the efficiency of the substitute product(s) relative to the product in question; and

4. the explicit and implicit transportation costs of the substitute product(s) and the product in question.

b. the above factors are not intended to be exhaustive.

W. Va. Code R. § 150-12-5