20090120final_order_no_30716.pdf

Office of the Secretary
Service Date
January 20, 2009
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF UNION PACIFIC
RAILROAD COMPANY'S INTENT TO
ABANDON THE COEUR D' ALENE
INDUSTRIAL LEAD FROM MP 7.5 TO MP
97 IN KOOTENAI COUNTY, IDAHO ORDER NO. 30716
CASE NO. UPR-08-
On July 3, 2008, Union Pacific Railroad notified the Commission that it intended to
file a petition with the Surface Transportation Board (STB) to abandon a portion of the Coeur
d' Alene Industrial Lead located in Kootenai County, Idaho. This short stretch of track is
approximately 1.29 miles in length running from milepost (MP) 7.5 near Gibbs to the end ofthe
line at MP 8.79 in Coeur d' Alene. The STB is the federal entity authorized to grant or deny rail
line abandonments.
On November 3 , 2008, Union Pacific filed its combined Environmental and
Historical Report for the line. On November 26, 2008, the Commission issued its abandonment
notice and scheduled a telephonic hearing for December 11 , 2008.At the hearing, the
Commission left the record open for two weeks so that interested persons could submit written
comments.
THE PROPOSED ABANDONMENT
Union Pacific indicated that it will file a petition seeking an abandonment
exemption" with the STB on or after November 17, 2008. The exemption process allows
railroads to abandon rail lines if the abandonment is of limited scope and does not adversely
affect national rail policy. 49 U.C. ~ 10502. Unlike the traditional abandonment process, the
exemption process allows a railroad to abandon a rail line in as few as 30 days. Under the
exemption process, there is no requirement to file a notice of intent to abandon or annual system
diagram map showing rail lines in jeopardy. To be eligible to file a petition for exemption, a
railroad must certify: (1) no rail traffic has moved on the line for the past two years and there are
no outstanding complaints about the lack of rail service on the line; or (2) circumstances (such as
in this case) otherwise support abandonment and the abandonment will not adversely affect
national rail policy. 49 C.R. 9 1152; Order Nos. 28540 and 30330. Under the exemption
procedure, the STB will publish a notice in the Federal Register within twenty (20) days after the
ORDER NO. 30716
petition for exemption is filed. Thirty (30) days after the notice is published in the Federal
Register, the railroad is permitted to abandon the rail line unless the STB stays the abandonment.
The Coeur d' Alene Industrial Lead generally runs in a northwest to southeast
direction from the Union Pacific mainline between Spokane and Athol. This line was originally
constructed in 1911 by the Coeur d'Alene and Pend Oreille Railway Company. UP
Environmental Report at 3. In 2004, Union Pacific abandoned 5.29 miles of track from the
middle" portion of the Coeur d' Alene Industrial Lead. The present abandonment pertains to the
eastern "end" of the line that was isolated by the previous abandonment. The line runs parallel to
Northwest Boulevard in Coeur d' Alene.
As Union Pacific indicated in its Environmental and Historical Report, this line
historically served Stimson Lumber Company s DeArmond Stud Mill. Id. at 3. Union Pacific
reported that it ceased operations on the line in October 2003 but continued to serve the mill via
an adjacent BNSF line pursuant to a haulage agreement. Union Pacific stated all production at
the DeArmond Mill ended in May 2008 and the mill is currently being dismantled. Id. at 4.
Union Pacific maintained that the property is being converted for other, non-industrial uses. Id.
The Railroad asserted the right-of-way proposed for abandonment may be suitable
for other public purposes, including use as a recreational trail. Id. at 3. "UP has entered
discussions with the Coeur d' Alene City Attorney s office and a developer regarding the possible
relocation of an existing trail onto the line s right of way. At present, the trail proposed for
relocation runs along the Coeur d'Alene River, approximately 250 feet (south of) the Line.Id.
Union Pacific reports that the line s right-of-way is approximately 100 feet wide. Id. at 12.
THE PUBLIC HEARING AND COMMENTS
The Commission convened a telephonic public hearing in this matter on December
, 2008. Dan Harbeke with Union Pacific s Public Affairs Office entered an appearance but
did not present evidence on behalf of Union Pacific. The Commission also took the testimony
from a person who owns a warehouse in Coeur d' Alene located on railroad property. I
The Commission Staff presented the testimony of Ellis Hire. Tr. at 4; StaffExh. 105.
Mr. Hire testified that the line was used to serve the DeArmond Stud Mill, but the mill was being
dismantled. When he viewed the right-of-way in August 2008, a salvage worker advised him
I During the hearing, it was determined that the warehouse is located on property leased from the BNSF
Railroad.Tr. at 20. Consequently, the testimony was not directly related to the abandonment of the Union Pacific line in
question.
ORDER NO. 30716
that the gondola car currently at the mill would be the last one transported over the line.
found no signs of current or future customers on the line proposed for abandonment. Tr. at 14.
Given the lack of shippers and the fact the mill was dismantled, he determined abandonment of
the line would not adversely affect the area being served or impair the access to vital goods and
markets. Tr. at 15-16.
The Commission also received two written comments. In a letter dated August 26
2008 , the City Attorney for Coeur d' Alene supported the abandonment. More specifically, his
letter stated that he did not "believe that this abandonment will adversely affect Idaho or the
citizens of Coeur d' Alene. There are currently no rail shippers on this line and I am not aware of
any prospective shippers." Exh. 106.
The Commission also received comments from Pan-American Railway. In its letter
Pan-American expressed an interest "in purchasing the railway and developing a log transload
facility moving logs from lake Coeur d' Alene to mills north of town particularly the Riley Creek
lumber mill at Chilco." Pan-American s CEO, Peter Cooper, insisted that the rail line in
question "is critical in maintaining a rail link to the lake as part of an intermodal transportation
corridor and freight transload facility." He noted that the rail line proposed for abandonment has
a history of industrial activity. Acquiring the line would allow Pan-American to remove 15 000
truck trips per year from U.S. Highway 95.
DISCUSSION AND FINDINGS
Although the authority to grant or deny a railroad abandonment rests with the STB
and is governed by federal law, the Commission does have an obligation under state law to hold
a public hearing regarding the abandonment. Idaho Code 9 62-424. As stated above, the
purpose of the hearing is for the Commission to determine whether the abandonment would
adversely affect the area being served.
We first turn to Pan-American interest in purchasing the line proposed for
abandonment. Federal law recognizes that any person may offer to purchase a rail line that is
proposed for abandonment. 49 US.C. 9 10904(c). Offers to purchase rail lines designated for
abandonment are to be filed with the affected railroad and the STB. Id.; see also 49 C.R. 9
1152.27. It is for the STB, not this Commission, to approve offers of financial assistance or
purchase. Thus, Pan-American s offer to purchase the line should be directed to Union Pacific
and the STB.
ORDER NO. 30716
Based upon our review of the record, the testimony offered at the public hearing and
the written comments, we find that Idaho shippers will not be adversely affected by the
abandonment. The mill that this line served no longer exists. The City and Staff maintained that
the abandonment would not adversely affect Idaho. We conclude that the abandonment will not
adversely affect the area, will not impede the access of shippers to goods and markets, and there
is little likelihood that this line has the potential for profitability. Should Pan-American s offer
be accepted by Union Pacific and/or approved by the STB, the abandonment will not occur.
ORDER
IT IS HEREBY ORDERED that this case be closed. The Commission will not file
comments with the STB regarding this abandonment.
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.UPR-08-
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. Within seven (7) days after any person has petitioned for reconsideration, any other
person may cross-petition for reconsideration. See Idaho Code ~ 61-626.
ORDER NO. 30716
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this ;2() 1"'-
day of January 2009. '
. .
~~ A.~~
MACK A. ~~, PRESIDENT
L/Bu~
MARSHA H. SMITH, COMMISSIONER
ATTEST:~l)~
D. Jewell
Commission Secretary
bls/O:UPR-O8-01 dh2
ORDER NO. 30716