Order No. 1991-R-496

September 27, 1991

File No. D2970-91/1

WHEREAS Alberta Gas Chemicals Inc. (hereinafter AGCI) is a shipper within the meaning of the National Transportation Act, 1987 (hereinafter the NTA, 1987) and intends to ship goods, namely methanol in shipper-supplied tank cars, from the point of origin at Medicine Hat, Alberta to Shelby, Montana;

AND WHEREAS AGCI has access to the lines of only one railway company at the point of origin of the traffic, that railway company being Canadian Pacific Limited (hereinafter CP);

AND WHEREAS a continuous route is operated between Medicine Hat, Alberta and Shelby, Montana by two railway companies;

AND WHEREAS AGCI has designated a continuous route from Medicine Hat, Alberta to Shelby, Montana pursuant to subsection 134(4) of the NTA, 1987;

AND WHEREAS AGCI has requested CP to establish a competitive line rate from the point of origin to the nearest interchange with a connecting carrier;

AND WHEREAS AGCI and CP have been unable to agree upon the amount of the competitive line rate;

AND WHEREAS AGCI has made application to the Agency to establish the amount of the competitive line rate;

AND WHEREAS the Agency has considered the submissions of AGCI and CP in this matter.

THE AGENCY HEREBY DETERMINES THAT:

a) Burlington Northern Railroad Company (hereinafter BN) is a connecting carrier for the purpose of establishing the competitive line rate requested by AGCI.

b) For the purpose of establishing the competitive line rate, traffic is consigned to Shelby, Montana.

c) There is an agreement between AGCI and BN for the movement of traffic over the balance of the continuous route designated by AGCI.

d) The Coutts-Sweetgrass CP-BN interchange is the nearest CP-BN interchange in the reasonable direction of the movement of the traffic.

e) The amount of the competitive line rate cannot be determined in accordance with section 137 of the NTA, 1987.

NOW THEREFORE, IT IS ORDERED THAT:

1. Pursuant to its authority under section 142 of the NTA, 1987, the Agency hereby establishes the following method of determining the amount of the competitive line rate applied for by AGCI.
   

   a) Divide the total CP revenue for the movement of methanol by the total number of miles which CP transported loaded cars of methanol to obtain that revenue per loaded car mile. This calculates the revenue per mile.

   b) Subtract 25 miles, the distance for which the interswitching charge applies, from the mileage between the AGCI plant and Coutts. This calculates the distance to which the revenue per mile will apply.

   c) Multiply the quotient obtained in (a) by the mileage calculated in (b).

   d) Add the interswitching charge to the amount calculated in (c) to calculate CP's revenue per car for each competitive line rate movement.

   e) Divide the revenue per car by 95 to calculate the amount of the competitive line rate in dollars per ton.

2. The Agency, having performed the above calculations, has determined that the amount of the competitive line rate shall be C$8.80 per ton for the movement of methanol from the AGCI plant at Medicine Hat, Alberta to the CP/BN interchange at Coutts, Alberta/Sweetgrass, Montana, subject to the following conditions:
   

   a) The traffic shall be consigned to Shelby, Montana.

   b) No traffic moving at the level of rate established by the Agency shall have an ultimate destination in Canada or any other destination outside the continental United States.

   c) CP will have no obligation to make mileage payments to the owner/lessee of railway cars used to transport traffic for the distance travelled on the lines of CP.

   d) The rate shall remain in force for a period of one year from the date on which the rate becomes effective or such period as is agreed upon by AGCI and CP.

   e) Empty cars shall be routed back to Medicine Hat over the reverse of the continuous route designated by AGCI.

3. CP shall within seven (7) days of the date of this Order, issue and publish a tariff containing the competitive line rate and the rate shall become effective immediately upon issuance of the tariff.