Editorial: TVA Says It Can Save Millions By Switching To Rail

The Tennessee Valley Authority’s Gallatin Fossil Plant is considering a CSX Corporation proposal that says it could produce millions in savings for delivery of Western coal to the plant near Gallatin, Tenn. The proposal calls for switching deliveries to rail from barges, which have been handling them for about eight years.

A June 21 open house has been planned at Gallatin City Hall for the purpose of discussing the plan publicly. A decision is not expected until the end of summer.

Gallatin Mayor Don Wright, according to The Tennessean, sees flaws in the plan—specifically increased pollution and holding up traffic. The trains, each moving up to 135 cars, would pass through Gallatin fewer than five times a week, proponents of the proposal say. Wright says the schedule would cause cars and trucks to idle for up to 10 minutes at four major thoroughfares in the city. He said he likes to help them [the plant] "but not at the expense of my citizens."

To neophytes in the towing-industry arena the announcement may seem startling. "How can that be?" they might ask. "We always have heard that barge transportation is cheaper!"

Well, the devil is in the details.

A plant like Gallatin burns millions of tons of coal. Eight years ago CSX did not have the capability of moving that much Western coal directly to Gallatin. That’s why the plant switched to barge deliveries, which utilized the Cumberland River and Ingram Barge Company units. Low-sulfur coal was moved by rail from Wyoming to the Mississippi River and transloaded to barges for the final leg of the trip.

Now, however, the trains have increased the number of cars they handle, and CSX is investing in more trackage, which increases the number of points to which it can deliver directly. The switch would eliminate the cost of transloading and save the millions of dollars the proposal talks about.

Barge and rail have been in competition as long as both have existed. Both have fought vigorously for business. Reality is that when both barge and rail transportation are available, rail services lower their rates to compete. When only rail service is available the cost goes up. Companies located on navigable waterways have been known to build docks to make barge service available even though they have no intention of using them. Availability of barge service forces railroads to be more reasonable.

We need to understand that the continued success of barge companies—any companies, for that matter—can depend entirely upon myriad factors. There is nothing wrong with CSX trying to regain delivery contracts. Nor is it wrong for towing companies to work for advantages that will bring the business back to them. It’s all part of the capitalistic system.

In the area of transportation, however, there is an added ingredient that may or may not play a role in decisions like the one to be made at Gallatin. In this case millions in savings are weighed against traffic jams and pollution. There is no question that TVA and other utilities are facing increasingly high costs for fuel, including coal. TVA reportedly is billions of dollars in debt, and it is trying to reduce that indebtedness. That’s a pretty big reality all by itself. But another reality is that environmentalists who wave the flag for pollution control don’t always come forth to help people like the Gallatin mayor support barge service.

We should recall that in the early 1970s the trucking and water transport industries got behind the railroads and supported passage of the Railroad Rehabilitation and Recovery Act. In 1974 the railroads backstabbed the towing industry by joining environmentalists to halt construction of the Mel Price Locks and Dam for about a decade. The cost to the taxpayer rose from an original project figure of $373 million to over $1 billion. During that decade western railroads boasted of being able to extract another $750 million annually in increased rates.

Water transportation has enough disadvantages without being ignored by the federal government. The water highways that make towing possible are in sad neglect and facilities are outmoded, causing costly delays. The playing field is not level. Coast Guard regulations have made it very difficult to attract and train qualified crews for towboats. The industry is facing a serious manpower shortage. Mountains of Coast Guard rules (now or soon to carry the weight of law) control every move of towing company operations. The nation will soon feel the adverse conditions brought on by this non-level playing field.

Interestingly, as we reported last week, transportation officials nationwide reminded us that the U.S. transportation infrastructure needs attention, or we will be in very deep trouble soon. We hope Congress is listening.

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