crowley_dh.doc

February 4, 2000

Thomas D. Crowley
L. E. Peabody & Associates
1501 Duke Street, Suite 200
Alexandria, VA 22314

RE: CAMAS PRAIRIE RAILNET ABANDONMENT
OF THE SPALDING-GRANGEVILLE LINE

Dear Tom,

Enclosed for your review is material dealing with the impending abandonment of the 66-mile Spalding-Grangeville line operated by the Camas Prairie RailNet. As you can tell most of this material came from a sale offering package at the time Union Pacific and Burlington Northern jointly owned the Camas Prairie. It was purchased by RailNet in 1998. The map on approximately page 7 shows the Camas Prairie RailNet enclosed within the dashed lines. The Spalding to Grangeville line is also referred to in these documents as the “second subdivision.”

Also included in the material is a track profile and track composition information regarding the second subdivision. As indicated, there are 43 bridges, 6 tunnels, 52 turnouts and 137 curves. As indicated in the track profile, there is a grade climb in what is normally referred to as the Winchester grade of more than 3,000 feet. I have also included a report dated April 26, 1995 from Design Nine, Inc. regarding its survey of the bridges, particularly bridges No. 17, 22, and 48 in the second subdivision. It is my understanding that the concerns noted in the report were rectified by the Railroad at the time of the sale or shortly thereafter and also followed an FRA inspection. I apologize ahead of time for the quality of the photos but my copy of this bid package was “a copy” as well.

Given the Railroad’s intent to abandon this branch, the Idaho Public Utilities Commission is interested in obtaining a neutral, third-party evaluation of the track and structures. As I mentioned in our phone conversation today, state law requires that the Idaho Public Utilities Commission conduct a hearing to determine whether: (1) the impact would be adverse to the area being served; and (2) whether the line has potential for profitability. Car traffic data for 1999 indicates that there were approximately 2,100 cars shipped including inbound propane, outbound finished wood products, outbound grain, and raw logs from Grangeville to Lewiston. I also understand that there were approximately three 75-car unit shipments of grain last year. I have also included a list of shippers.

The Commission desires to obtain an estimate for consulting services in two parts with the first regarding track inspection, structures inspection, and reviewing financial data provided by the Railroad at such time as they file their abandonment application. I also envision that this first part would include the preparation of testimony suitable for presentation to the Idaho Public Utilities Commission in its state hearing. If the Commission finds in its hearing that it is going to protest the abandonment at the STB, then the second part would be for Peabody to assist the Public Utilities Commission in preparing its protest and submit verified statements as part of the STB process.

I look forward to speaking with you next week to discuss the estimate(s) and hopefully plans for making an on-sight inspection. As I mentioned during our conversation, the closest major airport is Spokane but Lewiston is also served by Alaska Airlines’ regional carrier Horizon Air. If possible, I would like to accompany the inspector so that I may obtain a better understanding of the problems that you see.

If you have any questions, please do not hesitate to contact me at [phone].

Sincerely,

Donald L. Howell, II
Deputy Attorney General

Enclosures

cc: Commissioners
Ron Law

bls/L:Crowley_dh
Thomas D. Crowley
February 4, 2000
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