Crowley_dh2.doc

February 17, 2000

VIA FED EX

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

Re: Camas Prairie RailNet Contract

Dear Tom,

I have enclosed for your review a contract for technical services concerning the Grangeville-Spalding Branch. Camas Prairie RailNet has advised us that it does not anticipate filing its abandonment application until April 1, 2000. Thus, we have a little more time in which to do some preliminary work.

As you can see on page one of the contract, I still anticipate that Peabody may perform the services in two parts. First, would be the preliminary inspection of the track, structures, prepare testimony and participate in the PUC’s state hearing. At this point in time, I do not believe that we would fully set out all our issues in the State proceeding but just provide a sufficient amount of evidence so that the Commission may determine whether the line has potential for profitability and whether there is an adverse impact caused by the abandonment. The primary reason I believe it is not necessary to fully develop our evidence regarding opportunity costs, avoided costs, and forecast revenues is that we would not want to necessarily tip our hand to RailNet.

You will see in the compensation paragraph of the contract, I have simply put in a contract amount of $30,000 including travel. During our discussion last week, you mentioned that the contract would probably be between $25,000 and $30,000, plus expenses. Consequently, I just took the top number, hoping that your expenses may come in at the lower figure. If necessary, we can discuss amending the contract to cover higher costs. If the Contract meets with your approval, please sign both copies and return one to me.

I have also enclosed for your information a letter I have sent to the shippers regarding projected rail traffic. I am hopeful that rail traffic will hold steady or possibly increase for the forecast year. Given the number of structures on this line, I would be interested in your thoughts regarding the cost of dismantling all the bridges and other structures if the abandonment were granted. I am wondering whether the cost of removing the bridges and salvaging the line would outweigh the salvage value of the line? I have also enclosed Camas Prairie’s draft Environmental and Historical Report with many more photos of the bridges and other structures.

I am also prepared to ask the Railroad now to supply me with right-of-way maps and an estimate concerning the amount of subsidization that might be necessary to keep the line in operation. Because it has been a few years since I have done one of these cases, do you have suggestions concerning other questions I should be putting to the Railroad now? If so, please let me know. Also, please call me with the name(s) of the track and bridge inspector so I can tell Camas Prairie’s General Manager, Kevin Spradlin, the name of the person who he will be calling to set up a time for the inspection.

If you have any questions about the contract, please do not hesitate to contact me at [phone]. I look forward to working with you on this case.

Sincerely yours,

Donald L. Howell, II
Deputy Attorney General

Enclosures

cc: Ron Law

Vld/L:Crowley_dh
Thomas Crowley
February 17 2000
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