19990714McFarland Memo.doc

MEMORANDUM

TO: TOM McFARLAND

FROM: BRAD PURDY

DATE: JULY 14, 1999

RE: UNION PACIFIC’S PROPOSED ABANDONMENT OF THE BOISE CUTOFF

The Idaho Public Utilities Commission recommends that the Surface Transportation Board disallow the exemption process currently sought by Union Pacific for the proposed abandonment of the Boise Cutoff and further recommends that the Surface Transportation Board completely disallow the abandonment of any portion of the Boise Cutoff for the reasons set forth below. During the course of the evidentiary hearing conducted by the Commission in Case No. UPR-R-99-2, evidence was presented establishing that there has been considerable local and overhead traffic on the Boise Cutoff in the past two years. Union Pacific’s Senior Manager of Terminal Operations, headquartered in nearby Nampa, Idaho, testified under oath that the Boise Cutoff has been critically important for Union Pacific to utilize as a by-pass in several instances where there were derailments or problems with the mainline south of Boise. Moreover, Union Pacific uses the Boise Cutoff to store its own cars. In addition, Envirosafe has used the line to move and store cars containing hazardous waste. The Idaho Army National Guard has used the line for military training purposes. The Boise Locomotive Company frequently uses the line to test the locomotives that it rebuilds and repairs. As the hearing transcript indicates, Mr. Bonner conceded that there has been both local and overhead traffic on the line within the past two years. Tr. pp. 71-73.
Mr. Bonner further conceded that if Union Pacific is allowed to abandon the eastern portion of the Boise Cutoff, it would essentially curtail any possibility of Amtrak or other rail service from Boise to any destination East. Other witnesses testified during the hearing that the area served by the track proposed for abandonment lies in Boise’s industrial zone where it is anticipated that considerable growth will take place in the coming years. Boise, Idaho’s capitol City, is one of the fastest growing cities in the Nation. Mr. Bonner acknowledged that he has been in contact with potential future customers located in that area. Other witnesses testified that the abandonment of the eastern portion of the Boise Cutoff would have a devastating effect on the local economy. The abandonment was strenuously opposed by Boise’s Mayor Brent Coles.
Finally, if the eastern portion of the Boise Cutoff is abandoned, it will have the affect of concentrating any remaining rail traffic onto the western portion of the Cutoff which runs directly through the center of the City and is crossed by a number of roadways. Consequently, it will increase the risk of train/traffic related accidents.
Finally, Union Pacific’s Gary Bonner testified that Union Pacific had been earning a profit on the Boise Cutoff and would continue to earn a profit in the future absent the abandonment. Tr. pp. 65-66.
As indicated in Order No. 28094, the Commission’s analysis in defined under Idaho Code § 62-424 which directs the Commission to conduct a hearing in all abandonment cases to determine whether the abandonment would (1) adversely affect the area being served, (2) impair the access of Idaho communities to vital goods and services and market access to those communities, and (3) that the line has potential for profitability. The Commission found that all three of the foregoing criteria had been established and consequently recommends that the Surface Transportation Board disallow the abandonment of the Boise Cutoff.

Brad Purdy
Deputy Attorney General

bls/M:mcfarland_bp
MEMORANDUM 2