Through our River Operations business unit, we transported 44 million tons of cargo over inland waterways in 2014.
The nation’s inland waterways are of strategic economic and military importance because the commercially navigable waterways connect 41 states, providing the capability to move large amounts of freight cargo. These waterways carry agricultural commodities, chemicals, coal and petroleum products to ports across the United States. It is the most cost-effective delivery system we have for transporting raw materials that enables the United States to compete in a global marketplace. But the infrastructure supporting this commerce is past its 50-year lifespan, according to the Institute for Waterways, a unit of the U.S. Army Corps of Engineers, which maintains the waterways.
According to the Congressional Research Service, only one lock along the Ohio River has received funding to be replaced through the 2016 fiscal year. The Corps predicts that total domestic freight traffic is expected to increase by approximately 70 percent by 2020 yet, lock unavailability and delays have more than doubled over the past decade.
Why does this matter so much to AEP? Through our River Operations business unit, we transported 69 million tons of cargo over these waterways in 2014 – and more than 44 million tons of that cargo was transported on the Ohio River Basin, serving many of our power plants.
Five major lock closures in 2014 that resulted in 319 days of delay contributed to significant delays in delivering commodities, creating financial risk. We take action wherever possible to mitigate these risks. For example, if we know a lock is due for a scheduled outage, we can deliver coal to a power plant in advance of the lock closure.
AEP continues to support the 20-year capital development plan proposed by the Inland Waterways Users Board and various trade associations. In addition to process reforms, this plan would increase the fuel charge that commercial users of waterways (regulated and unregulated) would pay to help fund infrastructure improvements. Legislation that included parts of the capital development plan and important process reforms – Water Resources Reform and Development Act of 2014 – became law in June 2014. Legislation to increase the fuel charge also passed in 2014.
Congress’ failure to adequately fund waterways infrastructure would undercut the low-cost transportation required for American businesses to remain competitive in international markets and raise the cost of doing business and living in America.