McFarland-Plaistow_dh2.doc

May 5, 2000

VIA FAX

Thomas F. McFarland, Jr.
McFarland & Herman
20 North Wacker Drive, Suite 1330
Chicago, IL 60606-2902

Joseph J. Plaistow
L.E. Peabody & Associates, Inc.
1501 Duke Street, Suite 200
Alexandria, VA 22314-3449

Re: Follow-up on Tuesday’s Conference Call

Dear Tom and Joe:

I apologize for having to leave our conference call early but I was very satisfied with the exchange of information which took place. Enclosed for your information are several documents. First, I have enclosed a copy of Ed Morse’s letter to Camas Prairie’s attorney, John Heffner. After reviewing Ed’s questions, I think he has done his usual thorough job.

The other document that I have included for your information is the forecast year shipments from Columbia Grain. If my math is correct, Columbia is projecting 1,146 in the forecast year (excluding April 2001). I do not know whether Columbia intends to ship any unit-car trains in August-December 2000. I also am unsure about the break-down between barley and wheat or the point(s) of destination (if that makes a difference). In any event, I am pleased to see that Columbia’s estimated car shipments are “up” from the 1999 shipments.

Although I did not receive a written summary of the railroad-working group meeting from Tuesday, May 2, Gary Hanes tells me that talks are progressing and the shippers are exploring a range of alternatives. For example, Gary mentioned that the shippers are considering whether there would be any savings if shippers leasing their own cars instead of relying on Camas Prairie cars. The shippers are also discussing whether UP & BNSF could increase the per car allotments for Camas Prairie. Some of the larger shippers (most notably Columbia Grain and Lewiston Grain Growers—a division of Cenex Harvest States) might be able to bring pressure on the class 1 railroads.

Gary Hanes and I also discussed whether the University of Idaho might perform an economic analysis on the impact of rural and economic development caused by the abandonment of the rail line. I am not sure that such a study could be completed quickly enough for us to file in support of the verified statements. In addition, a “lukewarm” analysis may do us more harm than good in putting on our case. In other words, I think that we may have sufficient antidotal evidence from the shippers and local community officials (as well as my state witness from the Department of Commerce) to make a sufficient case of rural harm.

Gary also mentioned that Camas Prairie intends to file its abandonment application on May 16. Consequently, I have drafted another letter to John Heffner requesting several of the items we discussed during our telephone conversation last Tuesday and items contained in Ed Morse’s letter. I have enclosed the draft for your review. If you can think of other things that we want to ask for now, let’s add them to my letter. If the railroad files on May 16, when would be a good time to hold the state hearing?

Paul Wyatt told me today that he has located some financial materials regarding RailNet’s purchase of the Camas Prairie in 1998. He may call you, Joe, to discuss which documents, if any, you might like to see.

Finally, I am going to be out of the office next week checking on my parents in Ohio. I have left instructions with my secretary, Brenda (208-334-0324), to send the letter to Heffner. Please call her or send her any changes to the letter. I will take my rolodex with me and will check my voice mail for messages during the week. My parent’s telephone number in Sebring, Ohio is [phone]. They do not have an answering machine so if you want to leave a message you can leave one on my voice mail in Idaho.

Sincerely yours,

Donald L. Howell, II
Deputy Attorney General

Enclosures

Vld/L:McFarland_Plaistow_dh2
Tom McFarland
Joe Plaistow
May 5, 2000
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