In 1993, the municipally owned utility has been serving Gainesville, Florida was threatening a 23-mile rail spur to build, connect its coal-fired power plant with the tracks of the Norfolk / Southern Railway. The railway currently supplies coal, CSXT, had announced a large increase to take effect its current five-year contract at the end and had refused to allow Norfolk / Southern Railway, which was a lower rate in order to use CSXT tracks produce coal to the plant. CSXT had answered … Read more »

In 1993, the municipally owned utility has been serving Gainesville, Florida was threatening a 23-mile rail spur to build, connect its coal-fired power plant with the tracks of the Norfolk / Southern Railway. The railway currently supplies coal, CSXT, had announced a large increase to take effect its current five-year contract at the end and had refused to allow Norfolk / Southern Railway, which was a lower rate in order to use CSXT tracks produce coal to the plant. CSXT was the threat to spur utility by responding their proposed rate increase and build utility now had to decide whether to go with the spur or accept the new offer CSXT. This case, to discuss the barriers to entry, market power and appropriate public policy responses. HKS case number 1,299.0
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Jose Gomez-Ibanez
16 pages.
Release Date: 1 January 1995. Prod #: HKS198-PDF-ENG
Gainesville Regional Utilities HBR case solution