20041013Order No 29564.pdf

Office of the Secretary
Service Date
August 17, 2004
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF GREAT NORTHWEST
RAILROAD'S INTENT TO ABANDON THE
J A YPE BRANCH LINE LOCATED IN
CLEARWATER COUNTY, IDAHO.
CASE NO. GNW-O4-
ORDER NO. 29564
In May 2004, the Commission learned that Great Northwest Railroad intended to file
a petition with the Surface Transportation Board (STB) to abandon the J aype Branch line located
in Clearwater County, Idaho. This branch line runs approximately 31 miles in length from
Orofino at MP 0.0 to MP 31.0 near Jaype. Great Northwest is the successor to Camas Prairie
RailNet and is an operating subsidiary of W ATCO. The Jaype Branch essentially follows
Orofino Creek between Orofino and J aype. This line has historically been used to transport
lumber and forest products and a small amount of magnesium chloride. The Railroad'
Historical Report notes that there are 41 railroad bridges on the branch where the rail line crosses
back and forth over Orofino Creek.
On June 8, 2004, the Commission issued a Notice of Intent to Abandon and a Notice
of Hearing. Pursuant to Idaho Code ~ 62-424, the Commission held a public hearing June 28
2004 in Orofino. The purpose of the hearing was to obtain public testimony so the Commission
could determine whether abandonment of the J aype Branch line would be adverse to Idaho
public interest.
THE RAILROAD'S HISTORICAL AND
ENVIRONMENT AL REPORTS
On June 10, 2004, the Commission received the Railroad's Historical Report and
Environmental Report regarding the abandonment of the J aype Branch line. In both Reports
Great Northwest indicated that it intended to abandon the entire 31.0 miles of the line but
convert" the first 3.5 miles of the line "into spur track in order to continue serving (Konkolville
Lumber ) the one customer on that segment of the Line. There are currently no plans to remove
the bridges along the Line." Historical and Environmental Reports at
Great Northwest stated it acquired the Jaype Branch and other branches from Camas
Prairie in February 2004. The Railroad asserted in its Reports that although no traffic had moved
ORDER NO. 29564
over the J aype Branch for more than two years, it had discussions with "a potential customer" to
see if business could be developed for the branch. These discussions were unsuccessful so the
Railroad decided to petition the STB to abandon the line.
THE ABANDONMENT PETITION
On July 14, 2004, Great Northwest filed its Petition for Exemption to abandon the
J aype Branch line. Although the Railroad had initially intended to abandon the entire 31 miles
of the Jaype Branch, the Railroad discarded abandonment of the first 3.5 miles and only sought
abandonment of the latter 27.5 miles. Petition at 1 n. 1. Because no rail traffic has moved over
the latter portion of the line for more than three years, the Railroad filed for an abandonment
exemption under 49 D.C. ~ 10502.
In its Petition, the Railroad noted that Potlatch Corporation shipped approximately
000 carloads of logs and finished plywood annually over the line during the 1980s. These
carloads declined to approximately 3 500 by the end of the 1990s. Id. at 5. The Railroad
asserted that Potlatch has not shipped any cars over the subject line since June 2001. "Since then
Potlatch has demolished the plywood mill near Jaype and shifted its log traffic originating along
the Line to trucks.Id.
Although Great Northwest did not appear at the Commission s June 28 public
hearing, the Railroad mentioned the hearing in its Petition. . It observed that a few witnesses
testified "about potential industries that could locate along the Line if rail service were retained.
Id. However, the Railroad asserted that the STB has consistently held that "speculation about
future traffic is not a sound basis to deny an abandonment exemption.Id. at 6 (emphasis
added). Even though a former shipper (Idaho Lime) might ship up to 500 cars of lime a year
under the right conditions, it admitted at the PDC's hearing to having not shipped a single
carload since 1998. Id. Given the lack of foreseeable traffic, Great Northwest concluded that the
branch "is not economically viable now and has no potential of being profitably operated in the
. .
. future.Id. Consequently, Great Northwest requested that the STB exempt it from the
normal abandonment proceedings given the fact that no traffic has moved over the 27.5 miles of
the branch line for more than three years.
THE COMMISSION'S PUBLIC HEARING
At the time of the Commission s public hearing on June 28 , the Railroad intended to
abandon the entire 31 miles and had not yet modified its abandonment petition by forgoing its
ORDER NO. 29564
plans to abandon the first 3.5 miles of the branch. Consequently, several public witnesses
testified that abandonment of the first 3.5 miles should be disallowed because that portion of the
line is still in active service. In particular, Don Konkol testified that his sawmill (Konkolville
Lumber) shipped 182 cars in 2003 and 89 cars so far this year over the 3.5-mile portion. His
sawmill is located at or about MP 3.
Other witnesses urged the Commission to deny abandonment based upon the
potential for future traffic. Several witnesses discussed various proposals for returning rail
traffic to the line. For example, they suggested that it was possible that Idaho Lime might be
able to begin rail shipments. State Representative Charles Cuddy provided a written statement
suggesting there might be a new energy facility developed at Jaype or that lime deposits adjacent
to the railroad could be developed. Other witnesses indicated that there was still substantial
amounts of harvestable timber adjacent to the rail line and that it made good economic sense for
Potlatch to renew log shipments via the rail line. Although a Potlatch representative was present
at the hearing, he did not testify. Three economic development specialists said it would be more
difficult to bring economic development opportunities to the area if the rail line were abandoned.
The three Clearwater County Commissioners also testified they were disappointed
about the abandonment. Commissioner Curfman stated that the Railroad should be a partner in
economic development. Both he and Commissioner Leach testified that if the line is abandoned
it should be rail banked to preserve the right-of-way for possible future development.
Finally, the Idaho Department of Lands submitted written comments. The State is a
reversionary property owner on the part of the line to be abandoned. The Department
recommended that if abandonment is granted, then the bridges , culverts, and concrete barriers
should be removed. The Department was concerned that allowing these structures to remain in
the bed of Orofino Creek could result in debris accumulating against the structures. This could
lead to flooding downstream. That being said, the Department does support rail banking or
converting the line to Rails-to- Trail. In either of those instances, the maintenance of and liability
for the railroad trestles and other structures would be the responsibility of the acquiring entity.
DISCUSSION
At the outset, we note that it is the STB that has the authority to grant or deny
abandonment. We also observe that Great Northwest only petitioned the STB to abandon the last
27.5 miles of the branch. In other words, the Railroad did not seek to abandon the first 3.5 miles
ORDER NO. 29564
of the branch still used by an active rail shipper, Konkolville Lumber. Given the presence of an
active shipper, abandonment of the first 3.5 miles of the line would have been unreasonable and
would likely have prompted a protest by this Commission.
As stated in our Notice, the purpose of the Commission s public hearing is to
determine whether the abandonment would: (1) adversely affect the area being served; (2) impair
the access of Idaho shippers to vital goods and markets; and (3) whether the rail line has the
potential for profitability. Idaho Code ~ 62-424. Based upon our review of the Company
Application and the testimony offered at our public hearing, we find that Idaho shippers will not
be adversely affected. The portion of the line proposed for abandonment has no active shippers
and has not had any rail car shipments for more than three years. Potlatch has closed its Jaype
mill and has found other means to transport its log shipments.
We also find there is little likelihood that this line has a potential for profitability for
two reasons. First, as indicated in the Railroad's Petition and the testimony at our public
hearing, no traffic has moved over the 27.5 miles of the branch for more than three years. Given
this lack of traffic and revenue, it is evident that the J aype Branch has not generated any revenue
to defray the costs of retaining or maintaining this branch. Under STB regulations, abandonment
is typically granted by the STB if the Railroad certifies that no traffic has moved over the line for
at least two years. 49 C.R. ~ 1152.50.
Second, although several public witnesses suggested there may be a potential for new
traffic if either Potlatch or other shippers would begin using the line, there were no firm
commitments. As noted above, a Potlatch representative attended the hearing but did not testify.
Great Northwest's Petition recited the historic shipments of Potlatch. It also indicated that
negotiations with Potlatch to resume rail shipments were unsuccessful. Despite the best
intentions of those testifying, there is no evidence in our record that Potlatch intends to renew its
use of the branch. Idaho Lime is in a similar situation. Although several witnesses speculated
that Idaho Lime might develop a market for agricultural lime, the owner indicated that he had not
shipped on the. line since 1998. While we agree that abandonment of the line will reduce the
opportunities for economic development, the STB does not require railroads to retain lines that
are no longer in use. Unfortunately, we find there is no substantial evidence that this line has a
potential for profitability.
ORDER NO. 29564
One other item merits discussion.The Idaho Departments of Lands and
Environmental Quality both expressed concerns about bridges and other structures remaining in
Orofino Creek. It is our understanding that the State agencies intend to file environmental
comments with the STB. We encourage them to do so.
ORDER
IT IS HEREBY ORDERED that this case be closed. The Commission will not file
comments with the STB.
THIS IS A FINAL ORDER. Any person interested in this Order (or in issues finally
decided by this Order) may petition for reconsideration within twenty-one (21) days of the
service date of this Order with regard to any matter decided in this Order or in interlocutory
Orders previously issued in Case No. GNW -04-1. Within seven (7) days after any person has
petitioned for reconsideration, any other person may cross-petition for reconsideration. See
Idaho Code ~ 61-626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
-rA.
day of August 2004.
MARSHA H. SMITH, COMMISSIONER
ATTEST:
~.~
je D. Jewell
Commission Secretary
vld/O:GNWR0401 dh
ORDER NO. 29564