updated 2/17/2005 12:03:18 PM ET 2005-02-17T17:03:18

The Justice Department’s antitrust division is investigating the coal pricing practices of Union Pacific Corp. and BNSF Railway Co. out of Wyoming’s Powder River Basin.

Coal-industry trade publications have reported that Burlington Northern and rival Union Pacific have tried to raise rates as they pushed into public pricing.

Both companies said they were cooperating with the probe.

Union Pacific spokesman John Bromley said Thursday the Omaha-based railroad changed from long-term, negotiated contracts to posted, set prices early last year because it was not recovering the costs of reinvesting in the coal shipping business.

Union Pacific heard concerns from some electric utilities and initiated a meeting with the Justice Department in December to explain the new policy, Bromley said.

Bromley said the new pricing structure has nothing to do with another, systemwide initiative Union Pacific announced in January to charge more for some shipments and turn away others as it deals with high demand and crowded rails.

Nor is Union Pacific coordinating coal shipment prices with Burlington Northern, Bromley said.

“This is a unilateral action of Union Pacific,” Bromley said.

Burlington Northern officials disclosed the Justice Department’s investigation in its annual report, which was filed Tuesday with the Securities and Exchange Commission.

Chairman and chief executive Matthew Rose said company officials “have been aware of this inquiry for a couple months, and we’ll just see where it goes.”

“It comes down to ... whether or not we have the right to display these prices or to change out a long-term contract,” Rose said at a meeting of investors on Wednesday in Naples, Fla. “We have not been instructed to do anything differently. We don’t believe that we will.”

Both railroads get about 20 percent of their revenue from coal shipments, each doing more than $2 billion in coal business last year.

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