Nothing in this decision shall be construed to imply any guaranty In the absence of a stay or postponement by the Commission or the timely filing of an appeal, this decision shall be effective 30 days If the authority granted by this decision is not exercised within 1 year from the effective date, it shall be of no further force and APPENDIX Estimated effect of merger on rail carriers Baltimore and Ohio Railroad Company Chicago and North Western Transportation Company- Chesapeake and Ohio Railway Company--- Southern Pacific Transportation Company Toledo, Peoria & Western Railroad Company- Revenue gain (loss) DECISION No. AB-20 (SUB-NO. 1) TEXAS AND PACIFIC RAILWAY COMPANY ABANDONMENT BETWEEN BARNSDALL AND PAWHUSKA, IN OSAGE COUNTY, OK Decided April 10, 1978 On exceptions to initial decision. SUMMARY Missouri Pacific Railroad Company (applicant), as successor in interest to the Texas and Pacific Railway Company, seek a certificate of public convenience and necessity permitting abandonment of its line of railroad from milepost 188 near Barnsdall, OK, to milepost 201, the end of the line at Pawhuska, OK, a distance of 12.98 miles, in Osage County, OK. After public hearing, the Administrative Law Judge, in an initial decision served October 12, 1977, found that the abandonment should be permitted subject to conditions. Protestants Pawhuska Chamber of Commerce, city of Pawhuska, and Allen Brothers jointly excepted to the initial decision. Because of the burden continued operation of the line would impose on applicant and interstate commerce, we adopt the initial decision as the decision of the Commission, Division 1. Issue. Whether the burden of continued operation outweighs the hardship to shippers and the community expected to result from abandonment. Finding. We find that the present and future public convenience and necessity permit the abandonment. Discussion.-Protestants argue: (1) that the Administrative Law Judge did not consider all relevant circumstances because the line's recent losses are uncharacteristic and unrepresentative due to recent poor economic conditions in Osage County, and (2) that applicant has misrepresented the cost and need for rehabilitation over the line. Protestants do not contest applicant's losses on the line, but maintain that future increased traffic would be able to support the line. We believe that protestants' speculation that traffic will increase is not sufficient to justify continued operation of the line. New York, N. H. & H. R. Co. Trustees Abandonment, 228 I.C.C. 4, 23 (1938). Ordering continued operation by applicant, based on the mere possibility of future profitability, would place an unfair burden on applicant. Protestants attack applicant's rehabilitation cost figures. The line is, at present, designated class II' under Federal Railway Administration Safety Standards. Applicant has used a class III standard in computing rehabilitation cost for subsidization cost purposes (see hearing exhibits 2, 3, and 5). However, as the Administrative Law Judge stated, the Commission's new regulations governing abandonments provide only for necessary maintenance to comply with minimum FRA class I standards to be included for purposes of computing an estimated subsidy payment. See 49 CFR 11121.32(d)(3) and 1121.45. This means that while cost figures in evidence justify abandonment (apparently even before considering rehabilitation costs), applicant's estimated rehabilitation expense of $465,420 (see hearing exhibits 2, 3, and 5) could not properly be included in determining an appropriate subsidy amount. In fact, in the event of a subsidy offer on this line (or any line proposed for abandonment), any rehabilitation beyond the minimum class I standards would be instituted by mutual agreement of the parties. In the report adopting new abandonment regulations in Ex Parte No. 274 (Sub-No. 2), Abandonment of R. Lines & Discontinuance of Serv., 354 I.C.C. 129 (1976), the Commission said at 163: While it would be inappropriate to permit the railroad unilaterally to impose service levels above the minimum, the parties [in a subsidy arrangement] may mutually agree to a higher service level. Therefore, while we find protestants' objection to applicant's rehabilitation cost figures, which are based on the cost to rehabilitate up to class III standards, to be well taken for subsidy purposes, the objection is not material to the issue of present profitability of operations over the line. 'Class II lines operate with a 25 m.p.h. speed limitation under FRA track standards. The limits for class III track and class I track are 35 m.p.h. and 10 m.p.h.. respectively. We find that the evidence, considered in light of the exceptions. and reply, does not warrant a different result from that reached by the Administrative Law Judge and that the statement of facts, the conclusions, and findings of the Administrative Law Judge are proper and correct in all other material respects, and that the initial decision should be affirmed and adopted as our own. Order. Subject to the conditions set forth in the initial decision for the provision of financial assistance for continued operations or acquisitions of the line, an appropriate certificate authorizing abandonment of operations shall be issued and the applicant shall not effect any abandonment or discontinuance of service prior to the effective date of the certificate. The initial decision of the Administrative Law Judge, served October 12, 1977, is adopted as the decision of the Commission, Division 1, effective 30 days from the date of service of this decision. This decision is administratively final under the provisions of section 17(9)(c) of the Interstate Commerce Act. Any further administrative appeal can be entertained only under section 17(9)(d) of the act which permits such an appeal only if the entire Commission finds that a matter of general transportation importance is involved, that clear and convincing new evidence has been presented, or that there exist changed circumstances which would materially affect this decision. Such an appeal must be filed within 20 days of the date of service of this decision. The statement of facts, conclusions, and findings, decided September 28, 1977, of Administrative Law Judge Robert M. Glennon, follows: Applicant authorized to abandon service over its branch line between Barnsdall and Pawhuska, OK, subject to conditions required for compliance with Public Law 9410. John P. Legendre for applicant. T. Earl Curb, W. Robert Wilson, Max G. Morgan, and Jean T. Shumway for protestants. 360 I.C.C. This is an application filed October 21, 1974 by the Texas and Pacific Railway Company, of Dallas, TX, for a certificate of public convenience and necessity permitting abandonment of the line of railroad of that company extending from milepost 188 near Barnsdall, OK, in a northwesterly direction to milepost 201, the end of that line at Pawhuska, OK, a distance of 12.98 miles, in Osage County, OK. This line includes the stations of Barnsdall, Nelagony, and Pawhuska. A public hearing on the proposal was held on June 6 and 7, 1977, at Pawhuska, OK. The Commission's processing of the application was held in abeyance for a substantial period of time in order to permit compliance with the decision in Harlem Valley Transportation Assn'n. v. Stafford, 360 F. Supp. 1057 (S.D.N.Y. 1973), affirmed, 500 F. 2d 328 (Second Cir. 1974). Subsequently, an environmental threshold survey was prepared by the Commission's environmental affairs staff which concluded that the application, if approved by the Commission, would not constitute a major Federal action significantly affecting the quality of the human environment within the meaning of the National Environmental Policy Act of 1969. Following service of that survey upon the parties and the local newspaper publication of a summary of its findings, the Commission on January 31, 1977 issued a notice that public comments on the survey had not caused the Commission's staff to modify its previous conclusion. Subsequent to the filing of the application the Texas and Pacific Railway Company was merged into the Missouri Pacific Railroad Company, effective October 15, 1976, pursuant to the Commission's authorization in Missouri Pac. R. Co.-Merger-T&P and C&EI, 348 I.C.C. 414 (1976). During all of the time in question here prior to the merger, the two companies were operated as a single transportation company. Missouri Pacific, accordingly, will be treated as the successor in interest in every respect to the initial formal applicant. The applicant classifies the condition of the line in issue here as between poor and fair. The line is laid with 90-pound rail manufactured in 1929, and thus is of an age susceptible to breakages from wear and tear. About one-third of the ties have been laid as much as 20 and 25 years, and one-third where it laid about 6 years ago. There is a small diameter, lower quality chat ballast along the line, and there are problems with erosion. In several areas the line cuts through rock formations with rocks continually sliding down onto the track. Because of the condition of the bridges on the line, the line has a 220,000-pound maximum load limit, thus precluding use of 100-ton capacity jumbo hopper cars. Service on the Barnsdall-Pawhuska line is performed an average of 2 nights a week, as needed, with a work train operating out of Tulsa starting at about 8 p.m. The train operates between Tulsa and Barnsdall, a distance of about 40 miles, 5 nights a week. There would be no curtailment of service at Barnsdall as a result of this proposal.' Applicant has an agent at Pawhuska who spends some of his time each day also at Barnsdall. No employees will lose their jobs as a result of this application. The train and enginecrew now serving the line will have their daily mileage shortened by 6 miles, and their pay lessened slightly. The station agent will be able to work at another location. No other employees of the applicant will be directly affected. The Missouri Pacific proposes to sell the track materials at salvage value to a contractor who would agree to remove the crossings and bridge, and return the rightof-way generally to its natural condition. Abandonment of the line would extinguish At the hearing, however, applicant conceded that the Skiatook-to Barnsdall segment of this branch line has been designated as a category of line which the carrier anticipates will be the subject of an abandonment application within 3 years. This segment represents about half the distance between Barnsdall and Tulsa. |