26016.docx

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE ABANDONMENT OF IDAHO NORTHERN AND PACIFIC RAILROAD COMPANY’S ABANDONMENT OF THE COUNCIL BRANCH IN WASHINGTON AND ADAMS COUNTIES.
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CASE NO. IN-RR-95-1
ORDER NO.  26016
On February 21, 1995, Idaho Northern and Pacific (IN&P) Railroad Company notified this Commission that it intended to file a Petition with the Interstate Commerce Commission (ICC) to abandon 83.1 miles of the Council branch rail line located in Washington and Adams Counties.  This branch extends from Weiser to Rubicon and provides service to the communities of Midvale, Cambridge, Council and Tamarack.  This Commission conducted a public hearing in Weiser on March 23, 1995 to determine whether the abandonment would adversely affect Idaho’s public interest.  Based upon the evidence presented at the Weiser hearing, the Commission has determined not protest the branch abandonment.
BACKGROUND
Until recently, there were three shippers using the line: (1) the Boise Cascade mill in Council shipping lumber, logs and wood chips; (2) Evergreen Forest Products in Tamarack shipping outbound finished lumber and chips and inbound used railroad ties; and (3) Amerigas near Rubicon receiving inbound propane cars.  During 1994, these three shippers sent a total of 1,881 rail cars:  Boise Cascade—1,371; Evergreen—499; and Amerigas—11.  
In January 1995, Boise Cascade announced plans to close its Council mill leaving Evergreen and Amerigas as the only shippers on the line.  IN&P contended that it cannot operate the line profitably with the remaining annual car shipments.  IN&P indicated it would file a Petition for Exemption with the ICC on or about March 10, 1995.   
The ICC is the federal agency vested with the authority to grant or deny the abandonment of a rail line.  This Commission’s role in rail abandonment proceedings is to determine whether the abandonment would be adverse to Idaho’s interests and to coordinate the submission of comments to the ICC.  Idaho Code § 62-424 requires that the Commission convene a public hearing on the proposed abandonment.  If the Commission finds that the abandonment of the branch line would:  (1) adversely affect the area being served; (2) impair the access of Idaho communities to vital goods, services and markets; and (3) that the line has a potential for profitability, then the Commission may oppose the abandonment before the ICC.
There are two kinds of abandonment proceedings before the ICC.  The usual process is for the Railroad to file an Application seeking abandonment.  The abandonment Application normally contains detailed operating expenses and revenue to allow interested persons to examine the financial condition of the subject line.  An abandonment proceeding is usually completed in approximately 200 days.  The other type of abandonment proceeding (such as in this case) is a petition to be exempt from the usual abandonment requirements.  A Petition for Exemption requests a streamlined process that does not require the detailed information required in an abandonment Application.  The exemption process is used where there has been no traffic on the line for two years or where there is a significant change in rail operations.  Exemption requests, unless opposed, are approved within 30 days after publication in the Federal Register.
THE HEARING
The Commission conducted a public hearing in Weiser, Idaho on March 23, 1995 to receive public input and determine whether the criteria set forth above are satisfied in the present case.  The Commission received testimony from Mr. Ron Kerr, a representative from the Idaho Transportation Department (ITD), and ten members of the public.  Kerr is the state rail planner for the ITD which is responsible for state rail planning and the administration of the local rail freight assistance program.
Kerr confirmed the 1994 car shipments and noted that the Boise Cascade mill will soon close.  After the closure of the mill, the remaining shippers will ship approximately 500 carloads per year over the 83 mile line.  In other words, approximately 70% of the existing rail traffic will be discontinued.  He has been informed that Evergreen Forest Products has made alternative arrangements for the shipment of its products using trucks that will deliver to both Weiser and Lewiston.  Kerr concluded that abandonment would adversely affect the access of vital goods and services for the affected communities within Washington and Adams counties but offered no opinion regarding the profitability question.
Kerr estimated the additional traffic that will result from the conversion of rail to truck shipping for Evergreen Forest Products to be 750 to 800 trucks per year or two to three per day.  He notes that current commercial vehicle volume on the highway between Weiser and Council averages 280 daily and total average daily traffic is 820 vehicles.  Thus, truck traffic over the Weiser to Council section of Highway 95 is estimated to increase by approximately 1%.  The estimated additional truck traffic on Highway 95 from Tamarack to Lewiston is estimated to be 1,050 to 1,150 trucks per year or three to four per day.  Current commercial vehicle volume averages 300 daily between Tamarack and Grangeville and 430 daily between Grangeville and Lewiston.  Again, this represents an increase in truck traffic of about 1%.  
The vast majority of the remaining public witnesses expressed concern solely over what would happen to ownership and control of the land on which the rail line is currently situated.  Those witnesses generally expressed their opposition to the line being converted to a “rails to trails” system.
Washington County Commissioner, Tony Edmondson, did testify that the abandonment of the line would impede the potential of future economic development for the area being served.  He acknowledged, however, that he was not aware of any new industries considering relocating to the area which would use the rail line in question.  Edmondson also expressed concern over the increase in truck traffic on U.S. Highway 95 that would result from the abandonment and the loss of the tax revenues paid by IN&P which, he estimates, are between $18,000 and $36,000.
Evergreen Forest Products, the largest shipper on the line, did not attend the hearing and did not indicate to the Commission any opposition to abandonment of the line.  Amerigas was represented at the hearing through David Fuson.  Amerigas indicated that although it shipped only 11 cars last year, it would increase its shipments to 20 cars during the current year.  Fuson states that Amerigas will be forced to relocate its propane storage tank because of the abandonment although the effect on the price local customers pay for propane will be minimal.
Finally, IN&P offered the testimony of Neil Cox, Director of Operations for IN&P’s Oregon division.  Cox noted that Evergreen had chosen not to oppose the abandonment and had made alternative shipping arrangements.  He further concluded that revenues received from Amerigas would not even pay for the annual tax liability to the counties.  He posited that IN&P would need  annual revenues of approximately $250,000 to remain profitable and that the railroad would receive only $4,000 from Amerigas (based on annual shipments of 11 cars).
FINDINGS
Pursuant to Idaho Code § 62-424, we find that the abandonment and physical removal of the Weiser to Council line will adversely affect the economies of Washington and Adams Counties.  Once a rail line is removed, of course, it is extremely unlikely that it will ever be replaced.  This leaves the communities which relied upon this line with fewer options for the shipment of goods and diminishes the ability of these two rural counties to develop and expand their economic base.  Similarly, we find that the abandonment will adversely affect the access of communities within Adams and Washington counties to vital goods and services.
Turning to the profitability criteria, however, we find that the evidence presented does not establish that this line has any potential to be operated at a profit.  To the contrary, what little evidence was presented clearly indicates that there is virtually no potential for profitability.  While we regret the abandonment of this line and the potential effect it will have on the economies of Adams and Washington Counties, there was simply no evidence presented to satisfy the final criteria of Idaho Code § 62-424.  Consequently, this Commission will not oppose the abandonment and our investigation should be closed.  
O R D E R
IT IS HEREBY ORDERED that, for the reasons set forth herein, that the Commission will not oppose abandonment of this branch.  Consequently, this case shall be closed.
THIS IS A FINAL ORDER.  Any person interested in this Order (or in issues finally decided by this Order) or in interlocutory Orders previously issued in this Case No. IN-RR-95-1 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 this Case No. IN-RR-95-1.  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                  day of  May 1995.

RALPH NELSON, PRESIDENT

MARSHA H. SMITH, COMMISSIONER

DENNIS S. HANSEN, COMMISSIONER
ATTEST:

Myrna J. Walters
Commission Secretary
vld/O-IN-RR-95-1.bp