HANSEN.docx

November 17, 1997
The Honorable Reed Hansen
4512 N. 26th W.
Idaho Falls, ID 83402
RE:  Union Pacific Rail Service
Dear Representative Reed:
During our telephone conversation last Friday, we discussed Union Pacific Railroad’s service problem.  More specifically, UP is generally experiencing problems in the areas of:  (1) supply of cars to customers and short line railroads to meet shipping demands; and (2) lack of locomotives to move cars in the Railroad’s 22-state system.
As I mentioned, the Surface Transportation Board (STB) within the U.S. Department of Transportation (formerly the Interstate Commerce Commission) recently initiated an investigation into rail service in the western United States.  The Idaho Public Utilities Commission filed comments with the STB outlining our concerns on behalf of Idaho shippers.  A copy of the Commission’s comments is enclosed.  On October 31, 1997, the STB declared a “transportation emergency” and ordered UP and other regional shortline railroads to immediately implement 11 procedures designed to reduce UP service problems.  I have also enclosed the summary of the STB’s order.
We also discussed the Commission’s authority over rail service.   The ICC Termination Act of 1995 precludes states from regulating “rail service.”  Consequently, this federal law has preempted various state statutes concerning the Public Utilities Commission’s historical authority over rail service in Idaho.  In addition, UP and the Burlington Northern-Santa Fe Railroads sued the Commission in state court earlier this year to restrict the Commission from regulating rail service within Idaho.  Based on the federal law, the Commission reluctantly agreed in the Court proceeding that its jurisdiction over rail service was preempted.  The Commission’s authority over rail safety and other issues are unaffected by the Act or the Court case.
Union Pacific’s CEO Richard Davidson met with the Governor last Friday concerning rail service problems.  Following the private meeting, the Governor and Mr. Davidson held a press conference.  The enclosed Idaho Statesman article discusses the press conference.  I have also included Internet articles from the Idaho State Journal and the Post Register.
I hope you find this information and the enclosed documents helpful.  If you have further questions concerning rail service, please contact Ron Law, the Commission’s Regulated Carrier Administrator, at [phone] or me at [phone].
Sincerely,
Donald L. Howell, II
Deputy Attorney General
cc:  Ron Law
      Commissioners
      Lawrence Wasden, OAG
bls/L-Hansen.dh