[Federal Register Volume 59, Number 160 (Friday, August 19, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-20544]


[[Page Unknown]]

[Federal Register: August 19, 1994]


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INTERSTATE COMMERCE COMMISSION
[Finance Docket No. 32544]1
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    \1\Embraced are two simultaneously filed notices of exemption: 
Consolidated Rail Corporation--Trackage Rights--CSX Transportation, 
Inc., Finance Docket No. 32544 (Sub-No. 1); and CSX Transportation, 
Inc.--Trackage Rights--Consolidated Rail Corporation, Finance Docket 
No. 32544 (Sub-No. 2).
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Consolidated Rail Corporation--Purchase, Lease and Operation--CSX 
Transportation, Inc.--Rail Lines in Jefferson and Indiana Counties, PA

AGENCY: Interstate Commerce Commission.

ACTION: Notice of decision accepting application for consideration.

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SUMMARY: The Commission is accepting for consideration the application 
filed July 21, 1994, by Consolidated Rail Corporation (Conrail) and CSX 
Transportation, Inc. (CSX), for approval and authorization of Conrail's 
purchase, lease, and acquisition of trackage rights with respect to 
certain railroad lines of CSX in Pennsylvania, and for the grant back 
of trackage rights to CSX from Conrail. Under 49 CFR part 1180, the 
Commission finds this to be a minor transaction.

DATES: Written comments must be filed with the Commission no later than 
September 19, 1994, and concurrently served on applicants' 
representatives, the United States Secretary of Transportation 
(Secretary of Transportation), and the Attorney General of the United 
States (Attorney General). Comments from the Secretary of 
Transportation and the Attorney General must be filed by October 3, 
1994. The Commission will issue a service list shortly thereafter. 
Comments must be served on all parties of record within 10 days of the 
issuance of the service list and confirmed by certificate of service 
filed with the Commission indicating that all designated individuals 
and organizations on the service list have been properly served. 
Applicant's reply is due by October 24, 1994.

ADDRESSES: Send original and 10 copies of all documents to: Office of 
the Secretary, Case Control Branch, Attn: Finance Docket No. 32544, 
Interstate Commerce Commission, Washington, DC 20423. In addition, 
concurrently send one copy of all documents to the Secretary of 
Transportation, the Attorney General, and applicants' representatives: 
(1) Docket Clerk, Office of Chief Counsel, Federal Railroad 
Administration, Room 8201, 400 Seventh St., SW, Washington, DC 20590; 
(2) Attorney General of the United States, United States Department of 
Justice, 10th St. & Constitution Ave., NW, Washington, DC 20530; (3) 
John J. Paylor, Consolidated Rail Corporation, 2001 Market Street--16A, 
P.O. Box 41416, Philadelphia, PA 19101; and (4) Charles M. Rosenberger, 
CSX Transportation, Inc., 500 Water Street, J-150, Jacksonville, FL 
32202.

FOR FURTHER INFORMATION CONTACT: Beryl Gordon, (202) 927-5610. [TDD for 
hearing impaired: (202) 927-5721.]

SUPPLEMENTARY INFORMATION: By application filed July 21, 1994, Conrail 
and CSX, collectively ``applicants,'' seek Commission approval under 49 
U.S.C. 11343, et seq., for Conrail to purchase, lease, and acquire 
trackage rights with respect to certain CSX lines entirely within 
Pennsylvania. Conrail will grant back trackage rights to CSX.
    In Finance Docket No. 32544, Conrail proposes to lease from CSX, 
for a 30-year term with an option to renew for an additional 30 years, 
a portion of the Indiana Subdivision from the connection with Buffalo & 
Pittsburgh Railroad, Inc. (B&PR), at DC Tower (milepost 0.0 at Cloe) to 
the connection with the Ridge Subdivision at Ridge Branch Junction 
(milepost 26.74).\2\ Conrail also proposes to purchase from CSX a 
portion of the Ridge Subdivision, from its connection with the Indiana 
Subdivision at milepost 0.0 to the rail switch into the Keystone 
electric generating plant at milepost 5.83 near Shelocta.
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    \2\Applicants request that milepost 0.0 at Cloe be changed to 
milepost 2.0 once the request by B&PR to reopen in Docket No. AB-39 
(Sub-No. 2X), see infra, is granted and the milepost of the 
discontinuance is amended from milepost 0.0 at Cloe to milepost 2.0 
south of DC Tower near Cloe.
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    In Finance Docket No. 32544 (Sub-No. 1), Conrail will acquire 
overhead trackage rights from CSX on the portion of the Indiana 
Subdivision from its connection with the Ridge Subdivision at Ridge 
Branch Junction (milepost 26.6)\3\ near Creekside to a connection to be 
established at a point to be mutually agreed upon between milepost 41.5 
and milepost 44.7 near Josephine. The trackage rights will be for a 30-
year term with an option to renew for an additional 30 years. They are 
limited to the movement of limestone, limestone substitutes, ammonia, 
rail materials, transformers, and coal terminating at Shelocta.
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    \3\Applicants refer to milepost 26.74 rather than milepost 26.6 
in Finance Docket No. 32544 (Sub-No. 1).
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    In Finance Docket No. 32544 (Sub-No. 2), Conrail will grant back to 
CSX trackage rights over the Indiana and Ridge Subdivisions that are 
being acquired and leased, for a coextensive period of time. The 
trackage rights on the Indiana Subdivision are overhead. The trackage 
rights on the Ridge Subdivision are both overhead and local, but the 
local trackage rights are restricted to limestone, limestone 
substitutes, ammonia, transformers and coal terminating at the Keystone 
electric generating plant. The limestone and coal transportation will 
be further restricted to commodities originating at quarries or mines 
served by CSX or short line railroads connecting solely with CSX, or 
originating or transloading on The Three Rivers Railway, B&PR, 
Allegheny Railroad, Beech Mountain Railroad, West Virginia Northern 
Railroad, Elk River Railroad, or Strouds Creek & Muddlety Railroad. No 
traffic originating on lines owned or leased by Conrail may be 
transported by CSX in local service under these trackage rights. The 
overhead trackage rights are restricted to movements to the portion of 
the Ridge Subdivision between Shelocta and Clarksburg and will 
terminate if CSX abandons that portion of track.
    Although these trackage rights are sought under agreements with the 
track owner, and therefore, fall within the class exemption procedures 
of 49 CFR 1180.2(d)(7), Conrail and CSX seek their approval as related 
transactions because the trackage rights and the other acquisitions are 
part of one integral transaction.
    Conrail will reach Cloe via trackage rights to be obtained for this 
purpose. Simultaneously with the filing of this application, Conrail 
filed for trackage rights over a line owned by Pittsburg & Shawmut 
Railroad from the connection with Conrail at Freeport to a connection 
with B&PR at West Mosgrove\4\ and trackage rights over B&PR from West 
Mosgrove to Cloe.5
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    \4\Consolidated Rail Corporation--Trackage Rights Exemption--The 
Pittsburg & Shawmut R.R. Co., Finance Docket No. 32349, (I.C.C. 
served Aug. 1, 1994).
    \5\Consolidated Rail Corporation--Trackage Rights Exemption--
Buffalo & Pittsburgh Railroad, Inc., Finance Docket 32503, (I.C.C. 
served Aug. 2, 1994).
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    CSX is a class I rail carrier operating a rail system comprising 
over 19,000 miles of track in 19 States, the District of Columbia, and 
the Province of Ontario, Canada. CSX is a wholly-owned subsidiary of 
CSX Corporation, a noncarrier holding company that owns and controls 
several carriers subject to Commission regulation, including: CSX; 
American Commercial Barge Line Company (an inland barge carrier); CSX 
Intermodal, Inc. (a motor carrier); and various other wholly owned 
carrier affiliates. The proposed purchase, lease, and trackage rights 
involve only CSX's rail operations in Pennsylvania. The carrier 
operations of CSX's other Commission regulated affiliates are not 
affected by the proposed transaction.
    Conrail is a class I rail carrier operating a rail system 
comprising over 17,000 miles of track in 13 States, the District of 
Columbia, and the Province of Quebec, Canada. Conrail is the wholly 
owned subsidiary of Conrail Inc.; it is not part of a larger railroad 
system.
    Applicants state that all rail service over the Indiana and Ridge 
Subdivisions has been previously discontinued.\6\ The Ridge Subdivision 
provides rail access to the Keystone electric generating plant located 
at milepost 5.83 near Shelocta. The plant has never received regular 
shipments of coal by rail. Prior to the discontinuance of service the 
plant occasionally used rail service for shipments of miscellaneous 
materials, heavy generating equipment for repair or replacement, and 
some test shipments of coal. The plant burns approximately 4.5 million 
tons of coal annually. It is primarily supplied by coal mined at or 
near the facility and delivered by conveyor belt or truck, but this 
coal is relatively high in sulphur content. Because the plant in the 
future must comply with the emission standards of the amended Clean Air 
Act7, it must obtain either lower sulphur coal, limestone for 
scrubbing, or both. Rail is the preferred mode to deliver these 
commodities to the Keystone plant, as these commodities are not 
available in quantity from local sources.8
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    \6\Buffalo & Pittsburgh Railroad Inc.--Discontinuance and 
Abandonment Exemption--in Jefferson and Indiana Counties, PA, Docket 
No. AB-369 (Sub-No. 2X), and CSX Transportation--Discontinuance of 
Service Exemption--In Jefferson and Indiana Counties, PA, Docket No. 
AB-55 (Sub-No. 457X), (ICC served Nov. 17, 1994).
    \7\Pub.L. 101-549, 104 Stat. 2399 (1990).
    \8\ The lines also provide access to an electric generating 
plant at Homer City. This plant also burns locally-mined coal 
delivered directly by conveyor belt or truck. While it does not use 
rail service for the receipt of any significant amount of fuel, it 
also wishes to preserve rail access for the movement of machinery 
and equipment.
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    Conrail serves origins that produce both lower sulphur content coal 
and limestone. This transaction will give the Keystone plant the option 
of receiving coal or limestone in single-line service from Conrail. 
Because Conrail is granting back to CSX trackage rights over the line 
segments being acquired and leased, CSX will also be able to provide 
single-line delivery of coal, limestone, and other products to the 
Keystone plant. Therefore, Keystone will acquire competitive single-
line rail service, an advantage that did not previously exist.
    Conrail expects coal to begin moving to Keystone as soon as service 
to the plant is authorized. It estimates that approximately 150,000 
tons a year will move for the first 3 years of service. It does not 
expect to move limestone until after the year 2000, when a scrubber is 
installed.
    Conrail states that the proposed transaction involves only about 31 
miles of track and one potentially major rail shipper. Assertedly, the 
transaction will have no significant impact on other carriers. No 
interchange points are located on the lines, and no additional through 
routes will be created. Nor do the lines contain any connections that 
could be used for overhead traffic or to construct new through routes.
    Applicants contend that the transaction will have no adverse impact 
on their employees because no rail service is presently conducted on 
the line. They do not object to the imposition of conditions for the 
protection of employees affected by the purchase, as set forth in New 
York Dock Ry.--Control-- Brooklyn Eastern Dist., 360 I.C.C. 60 (1979), 
as clarified in Wilmington Term. RR, Inc.--Pur. & Lease--CSX Transp., 
Inc., 6 I.C.C.2d 799 (1990), modified, 7 I.C.C.2d 60 (1990), aff'd sub 
nom. Rail Labor Executives' Ass'n v. ICC, 930 F.2d 511 (6th Cir. 1991) 
(Wilmington); for the protection of railroad employees adversely 
affected by the proposed lease, as set forth in Mendocino Coast Ry.-- 
Lease & Operation, 354 I.C.C. 732 (1978) and 360 I.C.C. 653 (1980) 
(Mendocino), as clarified in Wilmington, supra; and for the protection 
of railroad employees adversely affected by the proposed trackage 
rights in the related transactions, as set forth in Norfolk and Western 
Ry. Co.--Trackage Rights--BN, 354 I.C.C. 605 (1978), as modified in 
Mendocino.
    Under 49 CFR 1180.4(b)(2)(iv), we must determine whether a proposed 
transaction is major, significant, minor or exempt. The proposal here 
does not involve the control or merger of two or more class I railroads 
and has no regional or national significance.
    The transaction involves Conrail's purchase, lease, and acquisition 
of trackage rights and Conrail's grant back of trackage rights on the 
lines now owned by CSX in Pennsylvania. Because service on these lines 
has been discontinued, there is no actual, current competition to be 
lessened. Indeed, were it not for this transaction these lines 
apparently would be candidates for abandonment. While CSX's grant back 
of trackage rights is restricted as to certain types of traffic, the 
restrictions introduce the potential for market and geographic 
competition, if not direct head-to-head competition, a potential that 
would not otherwise exist for the Keystone electric generating plant. 
Because the proposed transaction would restore rail service, and the 
potential for rail competition, it clearly represents a benefit to the 
public. Accordingly, we find the proposal a minor transaction as 
defined in 49 CFR 1180.2(c). See RR. Consolidation Proced. of 
Significant Transactions, 9 I.C.C.2d 1198 (1993). Because the 
application complies with our regulations governing minor transactions, 
we are accepting it for consideration.9
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    \9\ While the application's market impact information is 
complete, the operating data (concerning operating plans for minor 
transactions) submitted in compliance with 49 CFR 1180.8(b) (Exhibit 
15) appear incomplete. This shortcoming, however, is inconsequential 
in this case.
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    The application and exhibits are available for inspection in the 
Public Docket Room at the Offices of the Interstate Commerce Commission 
in Washington, DC. In addition, copies may be obtained upon request 
from applicants' representatives named above.
    Any interested person, including government entities, may 
participate in the proceeding by submitting written comments. Any 
person who files timely written comments shall be considered a party of 
record if the person's comments so request. In this event, no petition 
for leave to intervene need be filed.
    Consistent with 49 CFR 1180.4(d)(1)(iii), written comments must 
contain:
    (a) the docket number and title of the proceeding;
    (b) the name, address, and telephone number of the commenting party 
and its representative upon whom service shall be made;
    (c) the commenting party's position, i.e., whether it supports or 
opposes the proposed transaction;
    (d) a statement of whether the commenting party intends to 
participate formally in the proceeding or merely comment upon the 
proposal;
    (e) if desired, a request for oral hearing with reasons supporting 
this request; the request must indicate the disputed material facts 
that can only be resolved at a hearing; and
    (f) A list of all information sought to be discovered from 
applicant carriers.
    Because we have determined that this constitutes a minor 
transaction, no responsive applications will be permitted. The time 
limits for processing a minor transaction are set forth at 49 U.S.C. 
11345(d).\10\
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    \10\Applicants have requested expedited handling. The procedural 
schedule we have established accommodates their request.
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    Discovery may begin immediately. We admonish the parties to resolve 
all discovery matters expeditiously and amicably.
    This action will not significantly affect either the quality of the 
human environment or the conservation of energy resources.
    It is ordered:
    1. This application is accepted for consideration as a minor 
transaction under 49 CFR 1180.2(c).
    2. The parties shall comply with all provisions stated above.

    Decided: August 16, 1994.

    By the Commission, Chairman McDonald, Vice-Chairman Phillips, 
Commissioners Simmons and Morgan.
Vernon A. Williams,
Acting Secretary.
[FR Doc. 94-20544 Filed 8-18-94; 8:45 am]
BILLING CODE 7035-01-P