Class III rail carrier Midcoast Railservice, Inc. (Midcoast), a subsidiary of New York-based Finger Lakes Railway Corp., on Aug. 16 filed with the Surface Transportation Board (STB) a petition under 49 U.S.C. 10502 for an exemption from the prior approval requirements of 49 U.S.C. 10903 to discontinue service over approximately 58.58 miles of rail line in Maine citing that it currently operates at an average loss of approximately $65,000 per month after losing its primary shipper in 2023.
According to the Class III rail carrier, when Midcoast began operating the Maine Department of Transportation (MaineDOT)-owned line in 2022, pursuant to a Lease and Operating Agreement, nearly all of its freight revenue was generated by serving a cement plant. Midcoast states that the cement plant ceased production in late 2023 and the remaining active shippers on the line are projected to generate “a total loss of less than five cars per month.” Midcoast also states that, after the discontinuance is consummated, “no operator with a common carrier obligation will remain on the line.” However, the Class III “believes that alternate transportation service by truck or rail/truck transload is available” for the three remaining customers, all of whom were served a copy of the petition, according to STB.
Midcoast asserts that, because this proceeding would involve the discontinuance of common carrier service and not abandonment of the line, which consists of the Brunswick Terminal Area between the east side of Church Road, milepost 14.97, and Rock Junction, milepost 16.40; the Rockland Branch between milepost 29.40 in Brunswick, Cumberland County, Maine, and milepost 85.55 in Rockland, Knox County, Maine; and the Atlantic Branch Line between milepost 85.55 and milepost 86.65 in Rockland, the question of whether the line “contains any federally granted rights-of-way is inapplicable.” Midcoast states that any documentation related to federally granted rights-of-way pertaining to this petition in Midcoast’s possession will be made promptly available to those requesting it.
According to Midcoast, the line constitutes the entirety of its operations. “Where, as here, a rail carrier is discontinuing service over its entire system, the Board does not normally impose labor protection under 49 U.S.C. 10502(g), unless the evidence indicates the existence of: (1) a corporate affiliate that will continue substantially similar rail operations; or (2) a corporate parent that will realize substantial financial benefits over and above relief from the burden of deficit operations by its subsidiary railroad,” according to STB. See Honey Creek R.R.—Aban. Exemption—in Henry Cnty., Ind., AB 865X (STB served Aug. 20, 2004); Northampton & Bath R.R.—Aban. near Northampton & Bath Junction in Northampton Cnty., Pa. (Northampton), 354 I.C.C. 784, 785-86 (1978); Wellsville, Addison & Galeton R.R.—Aban. of Entire Line in Potter & Tioga Cntys., Pa., 354 I.C.C. 744 (1978).
According to Midcoast, it does not have a corporate affiliate that has similar rail operations, and its corporate parent, Finger Lakes Railway Corp., will not benefit from the proposed discontinuance “beyond the relief it receives from the burden of deficit operations.” Therefore, if STB grants the petition for exemption, in the absence of a showing that one or more of the exceptions articulated in Northampton are present, no labor protective conditions would be imposed.
By issuance of this notice, STB is instituting an exemption proceeding pursuant to 49 U.S.C. 10502(b). A final decision will be issued by Dec. 4, 2024.
Because this is a discontinuance proceeding and not an abandonment, interim trail use/rail banking and public use conditions are not appropriate, STB noted. Because the majority of the line (from milepost 33.79 to the end of the line at Rockport) was abandoned before it was acquired by Maine DOT, and there will be environmental review during any subsequent abandonment for the remainder of the line (from milepost 33.79 to milepost 28.03), this discontinuance does not require an environmental review.
Any offer of financial assistance (OFA) for subsidy under 49 CFR 1152.27(b)(2) will be due no later than 120 days after the filing of the petition for exemption, or 10 days after service of a decision granting the petition for exemption, whichever occurs sooner. Persons interested in submitting an OFA must first file a formal expression of intent to file an offer by Sept. 16, 2024, indicating the intent to file an OFA for subsidy and demonstrating that they are “preliminarily financially responsible.”
All pleadings, referring to Docket No. AB 1341X, must be filed with STB either via e-filing on the Board’s website or in writing addressed to 395 E Street SW, Washington, DC 20423-0001. In addition, a copy of each pleading must be served on Midcoast’s representative, Justin J. Marks, Clark Hill PLC, 1001 Pennsylvania Ave. NW, Suite 1300 South, Washington, DC 20004. Replies to the petition are due on or before Sept. 25, 2024.
STB’s Decision
On Dec. 2, the STB announced its decision (download below) to allow Midcoast to discontinue service over approximately 58.68 miles of rail in Cumberland, Knox, Lincoln, and Sagadahoc Counties in Maine.
According to STB, Midcoast is directed to serve a copy of the decision to CSX Transportation and certify to the Board that it has done so by Dec. 9. This exemption will be effective Jan. 2, 2025. Petitions to reopen and petitions to stay the effectiveness of the exemption must be filed by Dec. 23, 2024.
