PROTEST_dh.doc

BEFORE THE
SURFACE TRANSPORTATION BOARD

CAMAS PRAIRIE RAILNET, INC.—ABANDONMENT—IN LEWIS, NEZ PERCE AND IDAHO COUNTIES, IDAHO.
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DOCKET NO. AB-564

PROTEST
AND
REQUEST FOR PUBLIC USE CONDITION
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This protest is filed pursuant to 49 C.F.R. ( 1152.25 by the Idaho Public Utilities Commission (IPUC) on behalf of the State of Idaho. Idaho strongly opposes the abandonment application filed by Camas Prairie RailNet, Inc. (CSPR) on May 26, 2000. The IPUC is the agency created by state law to supervise and regulate all public utilities in this state including railroad corporations. Idaho law requires that the IPUC hold a public hearing on any proposed railroad abandonment. The purpose of the state hearing is to determine whether the abandonment would be adverse to Idaho’s public interest. If the IPUC finds that the abandonment would be adverse to the public interest and that the line has a potential for profitability, then it is authorized to participate in the Surface Transportation Board’s proceeding on behalf of the State of Idaho.

THE STATE’S INTEREST
The State has a direct and substantial interest in the continued operation of CSPR’s rail line between Spalding and Grangeville, Idaho (the Grangeville line). Based upon the testimony and evidence presented to the IPUC at its hearing, abandonment of the Grangeville line would adversely affect the area being served and would impair the access of Idaho communities to vital goods, services, and markets. As reflected in greater detail in the attached Verified Statements, opposition to the proposed abandonment is unified and broad. The health and economic well-being of Idaho citizens would be harmed by the abandonment of the Grangeville line. The proposed abandonment is not in the public interest.
In addition, the Idaho Department of Commerce is empowered to promote Idaho tourism, agriculture, lumbering, manufacturing, and “further the welfare and posterity of its citizens.” Idaho Code § 67-4703. The Department is authorized to develop and promote international marketing for Idaho’s product and to promote and retain Idaho’s economic resources. Id.
Idaho also has an interest in protecting its environment and Idaho wildlife. The Idaho Department of Environmental Quality is responsible for protecting Idaho’s air and water quality and regulating the disposal of solid waste. Idaho Code §§ 39-3001 and 39-105. The Idaho Department of Fish & Game engages in the management and scientific study to “preserve, protect, perpetuate and manage” Idaho wildlife. Idaho Code § 36-103. All wildlife, including fish, “within the State of Idaho, is hereby declared to be the property of the State of Idaho.” Id.
SUPPORTING VERIFIED STATEMENTS
This protest is supported by the facts contained in the following Verified Statements which are attached to the Protest in the order set out below:

VERIFIED STATEMENT OF: POSITION Dirk Kempthorne Governor of the State of Idaho Joseph Plaistow Economic Witness for the
State of Idaho Richard McDonald Engineering Witness for the
State of Idaho Gary Mahn Director, Idaho Department of
Commerce Ed Morse Real Estate Witness for the
State of Idaho Barbara J. Barrows Assistant Commission Secretary-- submitting IPUC Order No. 28441
Steven Peterson Research Economist,
University of Idaho
Gregg Servheen Staff Biologist,
Idaho Department of Fish & Game Douglas Scoville Chairman, Idaho Barley Commission Denver Tolliver Highway Witness for the
State of Idaho

ADOPTION OF PROTEST OF
SAVE THE CAMAS PRAIRIE RAILROAD COMMITTEE

In addition to the evidence and argument contained in this Protest and its supporting Verified Statements, the State of Idaho hereby endorses and adopts the evidence and argument contained in the Protest and Opposition Statement being submitted by Save the Camas Prairie Railroad Committee (SCPRC). The State relies on the evidence in the SCPRC Protest that illustrates the specific harm and adverse impact to the shippers and agricultural producers affected by the proposed abandonment. In addition, the State specifically endorses the evidence provided in the Verified Statement of Paul Wyatt, the former general manager of CSPR.
OVERVIEW
Idaho protests this Application by CSPR to abandon its Grangeville line in central Idaho and requests that the Board deny the Application. Idaho’s protest is based upon a review of CSPR’s Application, the sworn testimony received at the IPUC hearing, and the verified statements of the State’s witnesses (attached to the Protest). As demonstrated by the State and SCPRC, abandonment of the Grangeville line is not permitted by the public convenience and necessity for several reasons: (1) the proposed abandonment would have an enormously adverse impact on rural and community development in the area served by the rail line; (2) abandonment would cause substantial and irreparable harm to shippers and receivers using the rail line; and (3) CSPR has not met its burden of proving that continued operation of the line would be unduly burdensome.
CSPR’s Application is deficient and should be rejected by the Board because it does not substantially conform to the Board’s regulations regarding content. 49 C.F.R. §§ 1152.22(d)(1), 1152.30(b), 1152.32. CSPR has under reported its revenues in the forecast year, over reported its expenses, and has significantly overvalued the net liquidation value (NLV) of its property. In addition, the proposed abandonment will deal a serious and adverse blow to rural and community development. Consequently, this Application should be denied.
INTRODUCTION
The Grangeville line originates at Spalding in Nez Perce County adjacent to the Nez Perce Historic Park and Museum and continues in a southeasterly direction and traverses Lewis County before terminating at Grangeville in Idaho County. From its inception at Spalding to approximately milepost (MP) 47, the line traverses the Nez Perce Indian Reservation. From Spalding to approximately MP 18, the line runs immediately adjacent to or traverses Lapwai Creek. Lapwai Creek has been identified by the federal National Marine Fisheries Service (NMFS) as critical habitat for a threatened species—the ocean-going steelhead trout. Environmental Assessment (EA) in Camas Prairie RailNet, Inc.—Abandonment and Discontinuance of Operations—In Idaho, Lewis, and Nez Perce Counties, Idaho, STB Docket No. AB-564 (issued June 28, 2000).
This line currently serves an area of central Idaho commonly referred to as the Camas Prairie. The Camas Prairie encompasses about 200,000 acres of prairie with an average elevation of approximately 3,000 feet. The Camas Prairie derives its name from the Camas root which was a staple food of the Nez Perce Indians. The Nez Perce Indians assisted Lewis and Clark’s Corps of Discovery expedition as it crossed Idaho in 1805. CSPR acquired this line from the previous carrier in April 1998. App. at Exh. B. Traffic on the line is comprised primarily of grain and lumber shipments with both in-bound and out-bound commodity shipments. Since 1997, traffic on the line has dramatically increased from 1571 cars in 1997 (App. at 3) to the shippers’ estimate in the forecast year of nearly 3,000. V.S. Plaistow, SCPRC Protest at 20. In other words, traffic on the line will almost double under the shippers’ forecast and will increase by 67% under CSPR’s own forecast. Amid this rapidly increasing traffic and revenues, CSPR placed the Grangeville line on its System Diagram Map in December 1999.
LEGAL STANDARDS
The statutory standard governing an abandonment is whether the present or future public convenience and necessity permit the proposed abandonment. 49 U.S.C. § 10903(d). In implementing this standard, the Board must determine whether the burden on CSPR from continued operation is outweighed by the burden on affected shippers and community from the loss of rail service. Colorado v. United States, 271 U.S. 153 (1926).
In determining whether to grant or deny an abandonment, the Board considers a number of factors, including operating profit or loss, other costs the carrier may experience (i.e., opportunity/economic costs), and the affects on shippers and communities. No one factor is conclusive. Cartersville Elevator, Inc. v. ICC, 724 F.2d 668, affirm’d on reh’g en banc, 735 F.2d 1059 (8th Cir. 1984).
In determining whether there is harm to shippers and communities, the Board must determine whether there is effective alternative transportation for users of the Grangeville line. Georgia Public Service Comm’n v. United States, 704 F.2d 538 (11th Cir. 1983). In Georgia PSC, the Eleventh Circuit determined that in order for there to effective alternative transportation, such transportation must be both logistically and economically feasible. Id. at 545. The mere fact that there is alternative transportation available is not enough; the transportation must be feasible and balanced against the harm to the Railroad.
The harm to rail carriers is normally characterized in one or more three distinct forms. First, and the most serious is operating losses where revenues attributable to the line are insufficient to defray the line’s operating costs. Second, is where rehabilitation costs (e.g., capital cost for repair or replacement of infrastructure) cannot be recovered from operating profit within a reasonable period. Minimum safety standards promulgated by the Federal Railroad Administration (FRA) determine whether such rehabilitation is required.
Third and least severe form of carrier harm is opportunity costs—where the profit from operating a line fails to provide a sufficient cost-of-capital return on the NLV of the rail line assets. Where sufficient harm to shippers and communities outweigh opportunity costs, the Board may appropriate deny the abandonment application. Southern Pacific Transp. Co. v. ICC, 871 F.2d 838, 483 (9th Cir. 1989); CSC Transportation, Inc.—Abandonment between Dayton and Arcanum, ICC Docket No. AB-55 (Sub-No. 336), served July 31, 1990 (not printed) at 19.
CARLOAD TRAFFIC
The State asserts that CSPR’s calculation of the rail car traffic for the base year (CY 1999) and forecast year (May 1, 2000 to April 30, 2001) is understated. CSPR maintains that there were 2,101 car shipments in the base year and estimates 2,621 car shipments in the forecast year. App. at Exh. F. CSPR’s carloads for the base year only differ from the State’s carload for two customers: Columbia Grain and Lewiston Grain Growers (LGG). Columbia’s records for the base year indicate that it shipped only 628 cars on the Grangeville line, while CSPR calculated 671 cars. V.S. Braun. LGG’s records indicate that they shipped 945 cars on the Grangeville line in 1999 but CSPR uses 805 cars. V.S. Younce. These adjustments increase traffic by 97 cars in the base year.
The State also asserts that CSPR has significantly understated the forecast year traffic. The State has tabulated forecast year carloads based upon the Verified Statements of the shippers (SCPRC Appdx. Nos. 4-10). Based upon IPUC shipper surveys, the State has shown no traffic in the forecast year for Idaho Lime and Lyman Dust Control. For the remaining two shippers, (Boyer and Lunders) the State and CSPR have utilized the same forecast carloads.
The Verified Statements of the shippers clearly constitute better evidence than the projections used by the Company. Indeed, CSPR’s forecast year projections are apparently based on oral conversations or letters that mostly went unanswered. App., Exh O at 4. CSPR’s general manager Kevin Spradlin insisted in his Verified Statement that three shippers, including Union Warehouse & Supply Company, “expected their use of the Railroad to stay about the same [in the forecast year] as it is now.” Id. at 4. CSPR projected 210 cars for Union Wareouse in the forecast year. App., Exh. F. However, attached to his Verified Statement (as Atch. No. 5) was a letter from Union Warehouse. Contrary to the assertions contained in Spradlin’s Verified Statement, Union’s letter states “if we go back to a more normal crop year, which we expect, we would have closer to 300 cars compared to the current of around 200 cars.” App., Exh. O, Atch. 5. CSPR apparently ignored this shipper’s forecast. Clearly the shippers written Verified Statements possess greater reliability than CSPR’s allegations based on oral statements.
The table set out below portrays the difference between CSPR’s traffic and the shippers’ traffic for both the base year and forecast year.
1999
Base Year
Forecast year Shipper Shipper CSPR Shipper CSPR Columbia Grain 628 671 808 671 Lewiston Grain Growers 945 805 870 805 U.S. Timber Co. 140 140 720 660 Union Warehouse 210 210 296 210 Shearer Lumber 213 213 213 208 Idaho County L&P 24 24 33 24 Atlas Sand & Rock 5 5 18 5 Lunders Logging 11 11 11 11 Boyer Land & Cattle 2 2 2 2 Idaho Lime Co. 14 14 0 14 Lyman Dust Chem. 6 6 0 6 TOTALS 2,198 2,101 2,966 2,621 Source: V.S. Plaistow, Table 1 (Exh. JJP-4).
REVENUE
As part of its Application, CSPR neither provided revenue per car data nor sufficiently detailed data to calculate revenue per car. The Railroad did however provide a total value for freight revenue, demurrage, revenue equipment, land leases, and easements. IPUC witness Joseph Plaistow utilized this information and calculated revenues in the base year and forecast year based upon the corrected carload presented by the shippers.
Although Lewiston Grain Growers (LGG) shows a car reduction from the base year to the forecast year, LGG’s rail tonnage will in fact increase. This occurs because LGG is using 100-ton grain cars instead of the 70-ton shuttle grain cars. V.S. Younce; V.S. Plaistow. Revenues will also increase because LGG is shipping six 75-car unit trains and one 25-car train. Id. Unit car trains will substantially increase CSPR’s revenue and reduce its expenses. The table below compares the base year and forecast year of revenue developed by the CSPR and the IPUC witness Plaistow.
Base Year
Carloads Forecast Year
Carloads IPUC CSPR IPUC CSPR Freight Revenue $670,410 $640,824 $1,018,629 $877,944 Demurrage 27,671 26,450 83,196 71,705 Revenue Equipment 60,133 57,479 38,284 32,996 Land leases, easements 60,829 60,829 60,829 60,829 Total On Branch Revenue $819,043 $785,582 $1,200,938 $1,043,475 Source: V.S. Plaistow, Table 2 (Exh. JJP-5).
In addition to the revenues shown in the table above, the Grangeville line has the potential to earn significantly more revenue. In particular, CSPR former general manager Paul Wyatt explains in his Verified Statement that CSPR could increase its revenue by more than $100,000 per year by successfully completing negotiations for trackage rights from Union Pacific Railroad (UP) between Ayer, WA and Hinkle, OR. V.S. Wyatt at 3-6. In addition, several of the grain shippers indicated that they could divert additional grain from truck to rail by moving grain from elevators not served by rail. V.S. Younce, V.S. Johnson. Shippers also discussed with CSPR the possibility of forming a limited liability company to lease covered hoppers and then sublease the cars to CSPR. Id. Other revenue generating actions which CSPR failed to follow up on included the willingness of shippers to increase rates to retain rail service, increase CSPR’s passenger excursion train to the Grangeville line, and increase revenue from speeder car clubs and the production of films. V.S. Cox, Bennett, Younce, Johnson, Barrows (Order No. 28441 at 8-10). Reportedly, CSPR received $185,000 in 1998 for the filming of the “Wild Wild West” on the Grangeville line. V.S. Cox.
ON-BRANCH AVOIDABLE COSTS
CSPR significantly overstated its on-branch avoided costs for both the base year and forecast year. In developing the avoided costs for the forecast year, the Board’s regulations prescribed certain accounting procedures. In particular, the Board’s regulations require that rail carriers establish a system to collect “at branch level the data necessary to compute the base year data” in an abandonment application. 49 C.F.R. 1152.30(b). The regulations further require that the avoidable costs of providing freight service on a branch line shall be for most railroad accounts the actual costs incurred in branch service. 49 C.F.R. 1152.32. Such costs are to be just and reasonable and “shall not exceed those necessary for an honest and efficient operation.” Id. CSPR has not used “actual” costs in several cost categories where actual costs are required. For other accounts, it has not used the appropriate statistics to allocate costs where an allocation is allowed. V.S. Plaistow, Exh. JJP-3. Consequently, the bulk of the avoidable costs for the base year do not adequately reflect CSPR’s actual costs. Thus, the Board, shippers, and other interested parties cannot adequately review and compare CSPR’s expenses between the base and forecast years.
A. Maintenance of Way and Structures Expenses
CSPR’s calculation of the maintenance of way and structures expenditures (MW&S) for the base year is not based upon actual costs. V.S. Plaistow, Exh. JJP-3. As shown in CSPR’s Exhibit 1 attached to its Application, MW&S costs for the base and forecast years are identical: $890,013. However, CSPR spent $628,480 in 1999 on its entire rail system comprised of 245 miles of track and structures. See App. Exh. N. In other words, CSPR alleges that it will spend approximately $260,000 more on just the Grangeville line than it actually spent on its entire system in 1999. V.S. Plaistow at 12-13.
Instead of reporting actual expense data, CSPR combined three elements to arrive at its MW&S costs. It added an estimate of normalized track maintenance of $200,400 ($3,000 x 66.8 miles) to the estimated bridge expenses of $271,382 and bridge capital of $418,231 contained in a 1998 report from Parsons Brinckerhoff (the Parsons Report). See App. Exh. D. However, relying on the estimates contained in the Parsons Report is inappropriate and unreasonable. There are several reasons why the Board should disregard the maintenance expenses mentioned in the Parsons Report.
First, no CSPR witness actually sponsors the two-year old Parsons Report. The CSPR witnesses that “mention” the Parsons Report were not the ones who prepared the Report or performed the analysis contained in the Report. Consequently, the assertions contained in the Report are unsupported, lack a proper foundation and not offered by a witness with personal knowledge of the allegations contained in the Report. In addition, no witness states that the observations and recommendations contained within the March 1998 Parsons Report are valid today. To contrary, IPUC witnesses Paul Wyatt and Richard McDonald state that based upon their observations, the bridge structures on the Grangeville line need no deferred maintenance.
IPUC witness Richard McDonald has over 40 years of experience in railroad engineering including Vice President and Chief Engineer with the Chicago & Northwestern Railroad Company. V.S. McDonald at 2. Based upon his personal inspection of the Grangeville line on March 15, 2000, he concluded that “all structural repair work necessary for the bridges on the Grangeville line at this time can be classified as normal maintenance.” Id. at 4. Based upon his personal inspection, he found no evidence “of unusual deflection or deterioration requiring immediate attention in any of the bridges on the Grangeville line. In can also be noted that the FRA also inspected and approved the conditions of the bridges on the Grangeville line.” Id. The alleged bridge expenses also flies in the face of statements contained in CSPR’s Application. More specifically, CSPR states in its Application that the Grangeville line “presently meets FRA Class 2 standards.” App. at 11. State witnesses Wyatt and McDonald as well as CSPR state that the entire Grangeville line (both track and bridge structures) meet FRA Class 1 standards.
Paul Wyatt, who was general manager of the CSPR at the time the Parsons Report was prepared, states that two subsequent FRA inspections do not support the Parsons Report. V.S. Wyatt at 7. Although CSPR installed crossties and rail, neither FRA inspection “noted any exceptions in regards to bridges, decks or approaches.” Id. Wyatt also stated that the second FRA inspection conducted about November 1999 found that the line “was in the best condition ever observed by that FRA inspector.” Id.
As the SCPRC pointed out in its Protest at pp. 16-17, some of the alleged bridge maintenance recommendations contained in the Parsons Report propose to replace every defective tie on every bridge. However, this level of maintenance greatly exceed FRA Class 1 or Class 2 standards, “neither of which requires replacement of every defective tie. Moreover, if it was considered to be annual maintenance it would be duplicated in CSPR’s estimate of $3,000 per mile for track maintenance.” SCPRC Protest at 17; V.S. McDonald at 9.
Based upon the foregoing reasons, the Board should disregard CSPR’s MW&S expense in both the base and forecast years. CSPR has failed to carry its burden that its alleged MW&S expenses are reasonable or appropriate.
Because CSPR did not provide evidence of its actual costs for MW&S for the base year, IPUC witness McDonald prorated CSPR’s system wide maintenance-of-way costs. This results in a MW&S cost in the base year of $171,575. V.S. McDonald at 6; V.S. Plaistow, Exh. JJP-2. Based upon his recent inspection, McDonald observed that the prorated amount of $171,575 “corresponds much more closely to my own estimate of forecast maintenance costs necessary to retain safe operating conditions on the line, i.e., $100,020 for track maintenance, plus $125,010 for bridge maintenance for a total cost of $225,030.” V.S. McDonald at 6; V.S. Plaistow, Exh. JJP-2.
B. Maintenance of Equipment
Maintenance of equipment costs are made up of locomotive, freight car and other equipment including salaries, materials, supplies, fringe benefits, depreciation, and other costs. CSPR estimated avoidable costs in the base year of $190,092 based on the elimination of wages and benefits for one employee, elimination of two locomotives and allocation of freight car costs based upon the Grangeville line’s “car loads as a percentage of CSPR total car loads.” App., Exh. J, p. 4. As set out greater detail below, IPUC witness Plaistow maintains that the corrected base year expense is $143,249.
1. Locomotives. Although CSPR should have based its locomotive expenses using the Board’s allocation system to calculate the number of locomotive unit miles operating on the Grangeville line, the Railroad did not do so. V.S. Plaistow, Exh. JJP-3. CSPR claims that two locomotives will be eliminated (and their costs avoided) if the abandonment of the Grangeville line is approved. Because CSPR owns seven locomotives in total, the Railroad’s witness multiplied CSPR’s system costs by .285 (2 ÷ 7) to derived an allocation for the Grangeville line. However, the Board’s regulations require that the allocation be based on actual operating statistics. V.S. Plaistow at 19, Table 3, Exh. JJP-6.
In addition to not following regulations, CSPR over estimated the number of locomotives that it will be able to save. As explained by IPUC witness Plaistow, CSPR over allocated the number of engines to the Grangeville line. In particular, he calculated the CSPR currently serves the western half of the Grangeville line twice a week and operates to the end of the line at least once per week. V.S. Plaistow at 21. Based upon mileage switching and train speeds, he calculated that eliminating the Grangeville line would only avoid 4/7th of a single locomotive, or with rounding, one locomotive. In addition, SCPRC witness Wyatt testified that the Grangeville line’s locomotives are also assigned to other duties operating between Lewiston and Ayers, and Lewiston and Spalding. V.S. Wyatt at 8. Consequently, Plaistow calculated that the correct avoidable locomotive maintenance costs for materials and leases equal $48,217 in the base and forecast year. V.S. Plaistow at 19, Table 3 and Exh. JJP-6.
2. Freight Cars. CSPR also miscalculated freight car material and other expenses. V.S. Plaistow, Exh. JJP-3. Instead, it allocated freight maintenance and repair expenses based on a ratio of the carloads on the Grangeville line to the total CSPR system carloads. V.S. Plaistow at 22. Adjusting for the corrected carloads, his freight car expenses are shown in his Table 3 and Exhibit JJP-6.

C. Transportation
CSPR calculated that its avoidable transportation costs based upon the elimination of two locomotives and two train crewmembers. IPUC witness Plaistow adjusted for this expense to reflect the avoidable expense of one locomotive and one crewmember. He calculated that the correct avoidable transportation costs in the base year is $99,631 and $101,383 in the forecast year. Id. at 24, Table 4, Exh. JJP-6.
D. General Administrative Costs
Instead of allocating these costs based on actual costs, CSPR allocated costs based on a system-wide allocations comparing the Grangeville line carloads to the CSPR system carloads. Based on the operating adjustments and shipper carload data, IPUC witness Plaistow adjusted the avoidable general administrative expenses as shown in line 4 in his Table 5. Also included in the adjustment was avoidable vehicle related expenses for only one vehicle. V.S. Plaistow at 25. Finally, Plaistow adjusted the insurance expense to reflect the elimination of only two employees (instead of 3) and only one locomotive (instead of 2). Id.
E. Freight Car Costs
The Board’s regulations (49 C.F.R. 1152.32(g) provides that “freight car costs shall be separated between return on value of freight cars” and “freight car costs other than return on freight cars.” V.S. Plaistow at 25-26. CSPR did not provide any car miles or car day information but calculated its base year car-hire expense at $62,505. Id. It also includes $5,718 for return on value.
1. Other than Return. Given the lack of appropriate cost data, Plaistow accepted the base value modified to reflect the correct carload figure. Adjusted for carloads, Plaistow calculated that base year freight car costs on line 5g of State Exhibit 1 is $65,391 in the base year $70,732 in the forecast year. V.S. Plaistow at 26; Exh. JJP-2, JJP-6.
2. Return on Value. Plaistow also maintained that CSPR’s calculation of freight car return on value contains several errors. Rather than use the statutory income tax rate of 38%, CSPR actually used a rate of 37% to develop its nominal cost of capital. In calculating the “holding gain deflator,” CSPR actually used the change in gross domestic product (GDP) instead of the change in the value of the dollar. V.S. Plaistow at 26. In other words, CSPR witness Finley used an inflation rate of 5.5% to calculate the change in GDP instead of the correct rate of 1.5%. Id. at 27. This adjustment and calculation is shown in Plaistow’s Exhibit JJP-8.
F. Property Taxes
CSPR alleged that it would avoid $32,959 in property taxes in the base and forecast years. IPUC witness Plaistow asserts that these property taxes are not avoided. He stated that Idaho centrally assesses property tax. V.S. Plaistow at 28. If the line were abandoned, then line would no longer be centrally assessed by the State as utility property but would be subject to assessment by three individual county assessors. However, the remainder of CSPR’s operations still would be centrally assessed. Consequently, there “is no way of knowing the magnitude of the property taxes that would be assessed on the remainder of this CSPR following abandonment, and CSPR has provided no information to help make that determination” even though it is required to do so. Id.; 49 C.F.R. 1152.32(j)(2). CSPR has not documented that these property taxes are avoidable. Not having provided any information, CSPR has not carried its burden. Buffalo & Pittsburgh Railroad, Inc.—Abandonment Exemption, STB Docket No. AB-369 (Sub-No. 3X) issued Sept. 18, 1998.

OFF-BRANCH COSTS
Off-branch costs are intended to capture the costs of the Grangeville line’s traffic while that traffic is moving from Spalding to Lewiston or Ayer. V.S. Plaistow at 29. CSPR claimed to calculated its STB Phase III variable costs for off-branch portion of each movement. CSPR calculated that its off-branch costs are $392,004 in the base year and $522,354 in the forecast year. App. Exh. 1, Exh. K. However, CSPR has miscalculated its off-branch costs. V.S. Plaistow at 29. For example, CSPR eliminated all the costs associated with two crewmembers and two locomotives not just the portion of the costs incurred on-branch. This manner of costing results in a “double-count” of locomotive and crew costs in off-branch costs because the locomotive and crew that serve the Grangeville line also provide service on other CSPR rail lines. Even though CSPR charged all of the costs associated with those locomotive and crew in its on-branch costs, it charged locomotive and crew costs again in the off-branch costs for the very same locomotive and crew. V.S. Plaistow at 30.
To correct for this double counting, Plaistow adjusted the off-branch cost to recognize only those off-branch costs which are not already included in the on-branch avoided costs. Id. at 30-31. His off-branch costs are reflected in his Exhibit JJP-9. Accordingly, the State off-branch costs in the base year is $12,629 and $20,112 in the forecast year. Id. at 31; Exh. 1; Exh. JJP-2.
VALUATION OF PROPERTY
Return on investment for railroad property is only applicable in the forecast year and shall be computed pursuant to 49 C.F.R. 1152.34. Elements of the investment base include working capital, income tax consequences, and net liquidation value (NLV) of property. V.S. Plaistow at 31.
1. Working Capital. Turning first to working capital, IPUC witness Plaistow adjusted CSPR’s working capital because its branch costs were overstated and its return on value for freight cars was understated. He calculated that the correct value of working capital was $23,779 as shown in his Exhibit JJP-11.
2. Income Tax Consequence. Turning next to income tax consequences, CSPR claimed a tax benefit of $895,007 based upon the difference between estimated sales value of its land and property, less the net book value of the land and property, multiplied by CSPR’s combined federal and state income tax rate of 38%. Plaistow did adjust the tax consequences based upon the adjusted NLV of the track materials and right-of-way (ROW) property calculated by IPUC witnesses McDonald and Morse. See V.S. McDonald and Morse. Making this adjustment reduces the income tax benefit calculation to $276,406 as shown in Plaistow’s Exhibit JJP-11.
3. NLV. Based upon the Verified Statements of IPUC witness Morse and McDonald, Plaistow calculated that the correct NLV for the Grangeville line is $1,032,503 as shown in his Exhibit JJP-11.
NOMINAL RATE OF RETURN AND HOLDING GAIN
As previously mentioned, CSPR used an incorrect state and federal statutory tax rate of 37% instead 38% in the calculation of its nominal rate of return. Correcting for this error, the correct rate of return is 15.8% instead 15.91%. V.S. Plaistow at 33, Exh. JJP-12.
Turning to the holding gain, IPUC witness Plaistow previously noted that CSPR used the change in total gross domestic product of 5.5% instead of the implicit price deflator which was 1.5% between 1997 and 1998. Applying the 1.5% to the correct NLV produces a holding gain of $15,488 as shown in his Exhibit JJP-13.
In summary, Plaistow concluded that the Grangeville line is profitable in both the base year and forecast year. V.S. Plaistow, Table 6, Exh. JJP-2; Protest Exh. 1. Because the line is profitable, CSPR has not demonstrated any burden and the public interest is served by denying the Application.
ENVIRONMENTAL ISSUES
In his Verified Statement, Idaho Department of Fish and Game biologist Gregg Servheen asserts that a significant portion of the rail line runs along and at times crosses Lapwai Creek. V.S. Servheen at 1. In addition to a number of other fish species, he notes that the ocean-going steelhead trout is present in Lapwai Creek. The steelhead is a federally protected threatened species.
Based upon the presence of the steelhead and its critical habitat, any salvage, abandonment, and maintenance operations of the line must be carefully conducted to avoid harm or injury to the threatened fish, its habitat, and other wildlife. Harm is defined in the CFR as an act which kills or injures a protected species or conduct which significantly degrades habitat “essential for breeding, spawning, rearing, migrating, feeding, or sheltering.” Id. at 2. If the line is abandoned and salvage operations begin, there are many salvage activities which may adversely affect this protected species.
These activities or acts may include: 1) Removing or altering rocks, soil, gravel, vegetation or other physical structures that are essential to the integrity and function of a listed species’ habitat; 2) Altering stream flow in a matter that significantly impairs spawning, migration, feeding or essential behavioral patterns; 3) Constructing or maintaining or using inadequate bridges on stream banks or unstable hill slopes above stream habitats; 4) Conducting earth-moving or other operations that substantially increase the amount of sediments going into streams; 5) Conducting land-use activities that may disturb soil and increase sediment delivery in the streams; 6) Conducting various streambed disturbances such as removing gravel or other work in or adjacent to stream channels; and 7) Disturbing or repairing shoreline or streambanks.

Id.
To ensure that the steelhead, other species, and other water quality standards are not adversely affected, Servheen recommends that the Board require CSPR to prepare a Track Salvage and Stream Restoration Work Plan before salvage operation may begin. Between MP 0 and MP 18 (where the rail bed is immediately adjacent to Lapwai Creek), he recommends that sedimentation control devices be installed. Id. 3. Instituting environmental safeguards are in line with the recommended conditions contained in the Environmental Assessment (EA) released June 28, 2000. In the EA, the Section on Environmental Analysis (SEA) recommends that a biological assessment be prepared and that CSPR be prohibited from salvaging or disposing of the right-of-way and its track materials until completion of the Section 7 process under the Endangered Species Act, 16 U.S.C. § 1531.
Given the presence of the endangered species and the need to protect Idaho’s environment, the State maintains that instituting these necessary safeguards would increase the costs of track material removal. Consequently, CSPR may have significantly under estimated its removal costs for salvaging track materials (V.S. McDonald) and these additional environmental safeguards may reduce the marketability and value of right-of-way property between MP 0 and MP 18. V.S. Morse.
NET LIQUIDATION VALUES
A. NLV for Track and OTM
IPUC witness Richard McDonald calculated the NLV of track, ties and other-track-material (OTM). In his computation of the NLV, he assumed that the bridges would be dismantled and the value of the salvaged steel and timbers would offset the cost of removal. V.S. McDonald at 11. While this produced a “zero” value for bridges, he acknowledged that “the reality is that the cost to remove bridges would likely exceed the salvage” value. Id. He also noted that his estimate of NLV also takes into account the cost of possible biological assessment and any restrictive conditions that the State may impose on salvage operations, specifically on the 18 miles adjacent to Lapwai Creek, or 27% of the line.
He calculated that the NLV of the Grangeville line is $702,103 based upon current salvage rates. Id. at 11. This represents total NLV for track and materials of $1,594,626 minus removal costs of $633,550 which equal $961,076. When the 18 miles in the Lapwai Creek area are eliminated, this reduces the NLV to $702,103. His calculations are set out in detail in his Exhibit RHM-1.
B. NLV for the Right-of-Way
CSPR has significantly overstated the NLV of its right-of-way (ROW) property on the Grangeville line. The IPUC’s licensed real estate appraiser Ed Morse calculated that the NLV of the ROW property is $255,000. V.S. Morse at 4, Exh. EM-1 at iii, X. This compared to CSPR’s NLV appraisal of $758,000. Morse maintains that the CSPR appraisal did not consider several issues that significantly affect the NLV of the property.
Morse also notes CSPR’s appraiser, Kenneth Young, is not a licensed or certified real estate appraiser. V.S. Morse, Exh. EM-3 at 1. Morse asserts that under the Idaho Real Estate Appraisers Act, all real estate appraisers must be licensed or certified and only licensed or certified appraisers may appraise real property in Idaho. Idaho Code § 54-4103. Although the reviewer obtained a temporary certificate to practice in Idaho, she did not inspect the property or assume any responsibility for the appraisal report or its conclusions. Id. Morse maintains that both the Young appraisal and its administrative review are not in compliance with the Uniform Standards of Professional Appraisal Practice (USPAP) issued by the Appraisal Foundation. V.S. Morse, Exh. EM-3.
1. Reversionary Interests and Total Acreage. CSPR’s appraiser states that it “is my understanding that 21.47% of the underlying real estate is subject to reversionary interests.” App., Exh. Q (V.S. Young at 2). Consequently, he maintains that the Railroad “owns in fee” 78.53% of the ROW or 1,039.14 acres which does “not include any reversionary parcels.” Id. at 2 (emphasis original). If 1039.14 acres does not include any reversionary property and the Railroad owns 78.54% the CSPR ROW must contain approximately 1,324 acres. V.S. Barrows (Order No. 28441 at 2).
State witness Morse asserts that CSPR miscalculated the total number of acres in the ROW. He calculates that the Railroad ROW contains a total area of about 1026 acres, excluding road crossings and highway easements. Exh. EM-1 at 29, X. He further states that CSPR has erred in its reversionary estimate. Morse observes that a substantial portion of the Railroad ROW is reversionary to U.S. Department of Interior. Id., Exh. EM-1 at p. ii, ¶ 5. He particularly notes that approximately the first 47.7 miles of the 66.5 mile corridor lies within the boundaries of the Nez Perce Indian Reservation. Id., EM-1 at p. 28; V.S. Barrows (Order No. 28441 at 3). However, the Young appraisal does not even mention the existence of the tribal lands.
Based on his review of the ROW information, he maintains that approximately 357.2 acres out of the 1026.27 acres is reversionary property, or 34%. Exh. EM-1 at 46-47. A substantial portion of this reversionary property was acquired by CSPR’s processor under the General Right-of-Way Act of March 3, 1875, 18 Stat. 482. Protest Exhibit 2 contains copies of the “Schedule of Property” tables on the ROW valuation maps provided by CSPR. Under the columns “Kind of Instrument [or] Date of Instrument,” there are many references to “Act of 3-3-75.” A review of Exhibit 2 reveals there are approximately 162.5 acres that were acquired by the Railroad under the 1875 Act. This property is clearly reversionary. In Great Northern Rwy. Co. v. United States, the United States Supreme Court explained that the railroad’s right-of-way grants after 1875 were reversionary easements and not grants of land in fee. 315 U.S. 262, 62 S.Ct. 529 (1942).
A review of the “Schedule of Property” tables also shows that another 153.58 acres of the ROW were not recorded in the county records but were contained in the “Records of the Sec’ry of the Interior.” Protest Exh. 2, pp. 1-9. Morse maintains that these notations reflect property that is subject to reversionary claims held by the Secretary of Interior through the Bureau of Indian Affairs (BIA) in trust for the Nez Perce Tribe or members of the Tribe. Exh. EM-1 at 28, 46; Exh. EM-3 at 9. His assertions are further collaborated by the Department of Interior’s Bureau of Land Management (BLM).
The BLM’s local field manager, Greg Yuncevich, states the BLM has a reversionary interest as the federal land manager for the reversionary property acquired by the Railroad under the March 3, 1875 Act. V.S. Morse, Exh. EM-2 at 1; V.S. Yuncevich at 1. In both the letter to the Public Utilities Commission (Morse, Exh. EM-2) and Yuncevich’s Verified Statement to the Board, the BLM indicates that property acquired under the March 3, 1875 Act is an exclusive easement and as such would revert either to the federal land owner or subsequent underlying or adjacent property owners. At a minimum, the BLM will hold interest in at least 90 acres of the ROW. Id. Moreover, Yuncevich states in his letter and Verified Statement that a cursory review of his public land records indicates that approximately 20 miles, or 30%, of the right-of-way was acquired prior to the issuance of patents for those areas. V.S. Morse, Exh. EM-2 at 3; V.S. Yuncevich.
BLM’s Yuncevich further indicated that problems are likely to arise over private property boundaries because in many deeds the railroad is described as the property boundary. Consequently, removal of the railroad track may cause confusion regarding property boundaries. Morse Exh. EM-2 at 2; V.S. Yuncevich at 2.
2. Reservations. Morse next faults the Young appraisal for not considering the adverse impact on NLV caused by the reversions contained in the CSPR’s quit claim deed it received from Burlington Northern-Santa Fe (BNSF) on April 13, 1998. V.S. Morse, Exh. EM-2 (IPUC Staff Exh. 12). In particular, CSPR’s quit claim deed contains reservations to the grantor—BNSF. More specifically, the deed reserves coal, oil, gas, minerals, and the right “at any and all times to explore, or drill for and . . . move any such product . . . together with a permanent easement of access. . . .” V.S. Morse, Exh. EM-2; IPUC Staff Exh. 12 at p. 2; V.S. Barrows (IPUC Order No. 28441 at 4). In addition, the quit claim deed reserves to BNSF the right to develop and market any and all water rights and to construct permanent easements for pipelines or fiber optic communication lines. Id. at IPUC Staff Exh. 12 at pp. 2-3; V.S. Barrows (Order No. 28441 at 4). These reversions reduce NVL. Central Railroad Company of Indiana—Abandonment Exemption, STB Docket No. AB-459 (Sub-No. 2X) issued May 4. 1998.
3. Prior Conveyance. Morse also adjusted the total acreage to reflect that CSPR only has title of the ROW up to MP 66.5 not MP 66.8. V.S. Morse, Exh. EM-1 at 25, 28; Exh. EM-2 (IPUC Staff Exh. 12 at p. 1). He asserts that the .3 of a mile (66.8 – 66.5) at the end of the line in or near Grangeville is not owned by CSPR because it was conveyed to Shearer Lumber. This would comport with the quit claim deed only granting title to 66.5 miles. V.S. Morse, Exh. EM-1 at 28; Exh. EM-2 (IPUC Staff Exh. 12 at p. 1). Indeed, the Board’s operating authority issued in STB Finance Docket No. 33558 dated April 30, 1998 notes that the CSPR only acquired ROW up to Milepost 66.5. App., Exh. B.
4. Environmental Issues. Morse next identifies various environmental issues that would further reduce the marketability and the value of the ROW property. Particularly, he noted that the recent listing by the National Marine Fisheries Service of steelhead trout habitat for the lower 18 miles of the ROW adjacent to Lapwai Creek will reduce the value of the property. V.S. Morse at 4; Exh. EM-1 at 31 ¶ 2. Additional environmental issues include: Lapwai Creek has been designated as a 303D water quality impaired stream (Morse Exh. EM-1 at p. ii, ¶ 7, EM-1 at 32, ¶ 8); and land within the streamside corridor for approximately the first 15 miles of the ROW is subject to flooding and the flood plain restrictions (Exh. EM-1 at ii, 31-32 (¶ 3 and 5).
5. Structure Removal. Morse advises that the Railroad may incur additional costs by having to remove bridges and block tunnels. Given the size and magnitude of these structures, he indicated that they pose liability to any future land owner. V.S. Morse, Exh. EM-1 at iii. His position was supported by the BLM. The BLM objected to assuming the liability for these structures on lands that may revert to it. Id.; EM-2 at 2; V.S. Yuncevich at 2. As the BLM stated in its letters, the large “trestles and tunnels, if left in place, will present an unacceptable liability and public safety hazard. . . . If abandonment occurs and the ROW is extinguished, Camas Prairie RailNet should be required to remove all portions of the trestles and bridges and close the tunnels in a manner that will make them completely inaccessible to the public.” Id.
6. Appraisal Value. Morse asserts that the Young appraisal significantly over values the property. He notes that much of the railroad ROW’s highest and best use would be for grazing with some adjacent crop lands “but cuts and rock roadbed fill in the line and roadbed prevent crop land use of virtually all of the line. The predominant land type is grazing.” V.S. Morse, Exh. EM-1 at 30.
He also insists that the CSPR appraisal does not credibly analyze the difference in the characteristics between ATF sales and the subject corridor parcels. He said the appraisal also fails to consider the risk to marketability value and title to the ROW located within the Nez Perce Tribal boundaries and fails to consider the environmental affects on values and costs (flood plain, threatened species, water quality). He explained that “all of these mistakes overstate value.” V.S. Morse at 2-4, 6.
Based upon his land values and comparative analysis (contained in Exh. EM-1 pp. 38-48) Morse concludes that the value of the ROW property is rounded to $445,300. Exh. EM-1 at 47. He explained that his valuation adjusts for the value of land because of the railroad ROW as substantially more risks than typical property. V.S. Morse at 2-4; Exh. EM-1 at 45. Based upon the environmental consideration as well as the questions of title, he made a 50% adjustment from his ATF price on the lower segment (MP 0–approx. 17) of the line. Id. at 46 (Valuation Table). In other areas near towns or settled areas his adjustments were 20% or 25%. Exh. EM-1 at 45. In portions of the line that crosses agricultural area, he general employed a
50% adjustment is made from ATF prices to reflect the less desirable corridor lands from the cuts, roadbed fills, rock railbed, ballast, shape, and lost agricultural productivity. In some places the narrow shape of the corridor if not abutted by a grazing use will render the corridor almost useless. In some cases, use of the line is not economically feasible because of the rocky physical condition of the railbed line and the adjacent land use is not compatible with the limited grazing use the corridor is adaptable for. The adjustment was arrived at after considering other corridors across other agricultural areas, as well as inspecting the subject line itself and observing the numerous cuts, fills, and disrupted soils which result in diminished productivity for agricultural use.

V.S. Morse, Exh. EM-1 at 45.
Having arrived at his gross land value of $445,300, he adopted a five-year “sell off period” with sales costs projected to be 10%. Exh. EM-1 at 47-48. He also assessed that there will be engineering, environmental, and agency plannings prior to salvage activities. He calculated that these costs would average $5,000 per year. Id. Based on these adjustments and the comments noted in his appraisal and review of the Young appraisal, he calculated that the NLV for the ROW property is $255,000.
ADVERSE IMPACTS ON THE CAMAS PRAIRIE REGION
Without question, the proposed abandonment will have a serious and adverse impact on rural and community development in the Camas Prairie area. The SCPRC Protest outlines in great detail the specific adverse impacts to shippers caused by increased transportation costs, loss of markets, foregone expansion of facilities, and loss of depreciated value for recent investments of the shippers to utilize rail service. V.S. Younce; V.S. Bennett; V.S. Cox. SCPRC maintains that the proposed abandonment would result in the loss of current investment value totaling $558,090 and these improvements would be rendered obsolete. SCPRC at 14.
Contrary to the hollow assertion made by the Railroad (App. at 7), abandonment will have serious adverse impacts on the rural Camas Prairie area. Idaho’s Governor Dirk Kempthorne notes that rail service to Camas Prairie region “is essential if local businesses are to maintain their economic viability and if the state, local officials and other organizations are to succeed in promoting economic development.” V.S. Kempthorne at 1. He stated that unemployment in Lewis and Idaho Counties is 7.7% and 9.2%, respectively as compared to the unemployment rates in the State and the nation of 4.3% and 4.1%, respectively. Id. at 1-2. He maintains that closure of the U.S. Timber Mill in Craigmont “would have a devastating affect on the local economy and the affects would ripple throughout the entire Camas Prairie region. I am advised that closure of this mill would add a full percentage point to Lewis County’s unemployment rate. Abandonment would clearly cause a severe adverse impact on rural development.” Id. at 2.
The Idaho Department of Commerce’s Director also observes that the area served by the Grangeville line is economically distressed. V.S. Mahn at 1. The communities served by the Grangeville have “already been heavily impacted by decreases in allowed timber harvests and declining forest conditions on nearby federal land.” Id. Director Mahn states that existence of the line is critical to assist in the economic recovery of the area. Both Director Mahn and the Governor observed that abandonment would particularly disastrous for barley production in the Camas Prairie region. V.S. Kempthorne at 2; V.S. Mahn at 2. As the chairman of the Idaho Barley Commission explained at the IPUC’s public hearing, the 40,000 tons of malt barley produced in the Camas Prairie region is entirely transported by rail on the Grangeville line. Malt barley only is transported by rail because the purchasers only accept rail car delivery. Loss of rail service would effectively force the 670 barley growers in the three affected counties to withdraw from the malting barley market because of increased transportation costs. V.S. Kempthorne at 2; V.S. Mahn at 2; V.S. Scoville; V.S. Barrows (Order No. 28441 at 9-10).
These dire predictions are further supported by the State’s economic impact report prepared by research economist Steven Peterson and economist Dr. Mike DiNoto of the University of Idaho. They undertook a study to determine the regional economic impact regarding the proposed abandonment of the Grangeville line. V. S Peterson. Based upon their research, they calculate that the abandonment of the Grangeville line “will have enormous negative impacts on region economy.” V.S. Peterson at 1. The results of their analysis found that for every $1.00 of costs to the region from abandonment there is only 23 or 24 cents in offsetting benefits. Id. These negative impacts on the regional economies were based upon CSPR’s car shipment in the forecast year of 2,621. Id.
The Peterson-DiNoto Report found abandonment would have the following negative impacts on the Camas Prairie region including:
A total of $1.249 million in direct lost income to regional producers from increased transportation costs, plus an additional impact on the regional economy of a loss of $1.511 million in sales and $280,000 in lost labor income.

A loss of railroad tourism sales of $388,642 resulting in lost labor income of $170,546.

An increase of about 18,000 trucks per year on two-lane Highway 95 causing a regional loss of at least $114,980 in annualized sales and a loss of labor income calculated to be $50,456 from additional vehicle accidents.

Closure of the U.S. Timber mill would result in loss sales of $6.4 million in sales and lost labor income of $1.57 million

In total, the region will lose $8.428 million in sales and $2.071 million in labor income if the line is abandoned.

Id. at 1-2.
The Peterson-DiNoto Report concludes that abandonment of the Grangeville line will seriously hamper the region’s ability to attract manufacturing and other industries. Not only may the abandonment threaten U.S.Timber’s mill in Craigmont but abandonment will likely preclude the acquisition of a manufacture straw plywood plant in Grangeville. V.S. Peterson at 2. The proposed abandonment and its rippling negative affects will cause unemployment and poverty rates to increase in the Camas Prairie region. Finally, Peterson noted that abandonment coupled with the threat to remove the four Snake River dams “would result in the loss of direct producer income ranging from $2.6 to $7.1 million per year depending on the degree of transportation competitiveness in the region.” Id. at 2.
Governor Kempthorne, Director Mahn and others expressed concern about the increased number of heavy truck trips that would be caused by the loss of rail service. Given the mix of commodities, abandonment of the Grangeville line would concentrate these 18,000 truck trips during the fall harvest and beyond. Thus, trips would not be evenly spread throughout the year. In addition to the issues of public safety additional truck traffic will adversely affect highway and bridge maintenance costs. V.S. Mahn at 2.
State witness Dr. Denver Tolliver evaluated the impact abandonment would have to the potential highway and community-related issues. Using the conservative traffic level estimated by CSPR in the forecast year (2,621 cars), Dr. Tolliver determined that the combined effect of heavy trucks, long-trip distances, and utilization of some minor arterial collector highway “will result in an annualized incremental highway cost [to the State] of approximately $193,000.” V.S. Tolliver at 1. Using the shippers traffic data for the forecast year (2,966 cars), he calculated that annualized highway impact would be approximately $219,000. Id at 17. Although this range of incremental highway costs may be mitigated by an increase in revenue from truck fees, the net annual cost to the state and local highway system will likely result in annualized cost of between $187,000 and $213,000. Id. at 17.
Based upon the foregoing, it is clearly evident that the proposed abandonment of the Grangeville would have serious adverse impacts on rural and community development, the rural infrastructure and the Camas Prairie economy. The negative impacts would not only directly affect shippers but would seriously hamper economic recovery for this region, increase unemployment and poverty, and cause additional losses of income as well as infrastructure costs.
REQUESTS FOR PUBLIC USE CONDITION

Pursuant to 49 U.S.C. § 10905 and 49 C.F.R. 1152.28, the Idaho Transportation Department (ITD) requests issuance of a public use condition in this proceeding. ITD is a government agency vested with the authority to establish and maintain state highways within Idaho. Idaho Code §§ 40-501, 40-502. Although ITD believes that the abandonment should be denied, if the Board authorizes abandonment, then ITD seeks a public use condition. ITD maintains that portions of the rail right-of-way (ROW) is suitable for alternative public use, namely public highways.
ITD requests that the Board find the property is suitable for other public use and place the following condition on the abandonment:
An Order prohibiting the Camas RailNet from disposing of the rail corridor, other than the tracks, ties and signals equipment, except for public use on reasonable terms. Justification for this condition is that portions of the ROW are suitable for public highway use. The time period sought is 180 days from the effective date of the abandonment authorization, if granted. ITD needs this much time to conduct negotiation with the carrier.

In particular, ITD is interested in negotiating with the carrier for two general types of ROW property. The first consists of four existing locations where State Highway 95 crosses the Railroad ROW including: State Highway 95 at Grangeville; State Highway 95 at Craigmont; State Highway 95 at Tunnel No. 1; and State Highway 95 at Bridge No. 19. The second ROW property of interest is generally located between MP 0 and approximately MP 13. Imposition of a public use condition will allow ITD and the carrier to negotiate whether the adverse impacts of abandonment might be mitigated with augmentations to the State Highway system.
CONCLUSION AND REQUESTED RELIEF
As illustrated in this protest, shippers served by the Grangeville line want to retain rail service as indicated by the increase in traffic and their offers of concessions. There are serious discrepancies contained in the Application which warrant its denial. The State believes that this line is profitable now, that there is a demonstrated potential for profitability in the future, and that CSPR’s calculation of avoidable cost is not based on substantial and competent evidence. Here, CSPR has not met its burden of showing an actual operating cost or economic costs.
As amply demonstrated in the Protest, the abandonment of this line will have a serious, adverse impact on shippers, rural economy, and community development of the Camas Prairie. The enormous adverse impacts to shippers and the Camas Prairie region clearly outweigh the potential harm to CSPR. The present and future public convenience and necessity does not warrant abandonment of this line. Consequently, Idaho requests that the abandonment Application be denied.
RESPECTFULLY submitted this 10th day of July 2000.

Deputy Attorney General

PO Box 83720
472 West Washington
Boise, Idaho 83720-0074
[phone]

Attorney for Protestant, State of Idaho

VLD/L:protest_dh
Formally the Division of Environmental Quality.

The park is the only national park dedicated to a Native American tribe.
Ayer is CSPR’s interconnection point for UP and BNSF.

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STATE OF IDAHO PROTEST 32

STATE OF IDAHO PROTEST 1