Opinion
No. 2157 C.D. 2010
04-14-2014
Norfolk Southern Railway Company, Petitioner v. Public Utility Commission, Respondent
BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge HONORABLE ROBERT SIMPSON, Judge HONORABLE ROCHELLE S. FRIEDMAN, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY JUDGE SIMPSON
Pursuant to the Supreme Court's decision in Norfolk Southern Railway Co. v. Public Utility Commission, ___ Pa. ___, 77 A.3d 619 (2013) (hereinafter "Norfolk II"), this case returns to us on remand. Norfolk Southern Railway Company (Norfolk) seeks review of a final order of the Pennsylvania Public Utility Commission (PUC) that denied Norfolk's exceptions to the recommended decision of a PUC Administrative Law Judge (ALJ). The recommended decision allocated Norfolk 15% of the final cost of a bridge removal project at a railroad-highway crossing. Norfolk contends its freight operating agreement (Operating Agreement) with the National Railroad Passenger Corporation (Amtrak), constitutes a valid private cost allocation agreement as contemplated by Section 2704(a) of the Public Utility Code (Code), 66 Pa. C.S. §2704(a), which would divest the PUC of jurisdiction to allocate any of the project cost to Norfolk. Alternatively, Norfolk asserts the PUC's cost allocation was neither just nor reasonable under the particular circumstances of this case. For the reasons that follow, we affirm.
I. Background
A. Generally
The present case involves the PUC's final allocation of costs under Section 2704(a) of Code for the demolition and removal of the Colebrook Road Bridge (Bridge), a grade-separated, railroad-highway crossing that carried a Township road over Amtrak's "Keystone" rail line in East Hempfield Township (Township), Lancaster County (County). Currently, Norfolk operates three local freight trains on the line pursuant to its Operating Agreement with Amtrak.
Despite several attempts to repair the Bridge, it continued to deteriorate. In 1987, the Pennsylvania Department of Transportation (DOT) closed the Bridge to vehicular traffic. In June 2003, the PUC ordered the Township to remove the Bridge, and bear the initial cost of removal. As a result of delays arising from Amtrak's lack of cooperation, the Township obtained three extensions for completion of the project. The last extension expired in June 2008. Ultimately, the Township hired a contractor, J.D. Eckman, Inc. to perform the demolition and removal on an emergency basis. The contractor completed the project in July 2008. A separate contractor, SYSTRA Consulting, Inc., removed Amtrak's electrified catenary wires from the underside of the Bridge.
In September 2008, the PUC's Bureau of Transportation and Safety (Safety Bureau) confirmed the Bridge's removal and notified the parties of their right to a hearing on final cost allocation. The Township requested a hearing. The Township, Amtrak, the County, Norfolk and the Safety Bureau participated to some extent in the cost allocation proceeding.
Section 2704(a) of the Code provides (with emphasis added):
(a) General rule.--The compensation for damages which the owners of adjacent property taken, injured, or destroyed may sustain in the construction, relocation, alteration, protection, or abolition of any crossing under the provisions of this part, shall, after due notice and hearing, be ascertained and determined by the commission. Such compensation, as well as the cost of construction, relocation, alteration, protection, or abolition of such crossing, and of facilities at or adjacent to such crossing which are used in any kind of public utility service, shall be borne and paid, as provided in this section, by the public utilities, municipal corporations, municipal authority or nonprofit organization authorized under section 2702(h) (relating to construction, relocation, suspension and abolition of crossings) concerned, or by the Commonwealth, in such proper proportions as the commission may, after due notice and hearing, determine, unless such proportions are mutually agreed upon and paid by the interested parties.66 Pa. C.S. §2704(a).
B. ALJ's Recommended Decision
In June 2010, the ALJ issued a recommended decision. See Reproduced Record (R.R.) at 470a-555a. The ALJ recognized Amtrak is exempt by federal statute from being assessed costs for maintenance and repair of local rail-highway crossings. Nat'l R.R. Passenger Corp. v. Pa. Pub. Util. Comm'n, 848 F.2d 436 (3rd Cir 1988), cert. denied, 488 U.S. 893 (1988). Nevertheless, the ALJ recognized Amtrak's federal exemption does not preclude assessment of costs against Amtrak for protection of its own operations. Therefore, the ALJ assigned Amtrak financial responsibility for $59,130.02 in costs associated with the protection of its own operations and facilities during the Bridge removal project. Amtrak's tax exemption is not at issue in this appeal.
The ALJ allocated the remaining final costs of $525,441.48 as follows:
| Township | $367,809.03 | (70%) |
| Norfolk | $78,816.22 | (15%) |
| County | $52,544.15 | (10%) |
| DOT | $26,272.08 | (5%) |
C. PUC's Denial of Exceptions
Norfolk, the County and DOT filed exceptions to the ALJ's recommended decision. Ultimately, the PUC denied all exceptions. For purposes of this appeal, we need only review Norfolk's exceptions.
Exception No. 1.
In Exception No.1, Norfolk objected to the ALJ's Conclusion of Law No. 20, which provides:
20. The [PUC] is not precluded from allocating costs to [Norfolk] by the Commonwealth Court decision in City of Chester v. Pa. P.U.C., 798 A.2d 288 (Pa. Cmwlth. 2002). [R.R. at 551a.]
Norfolk argued City of Chester precludes any cost allocation to it because railroads are exempt from cost allocation where, as here, the railroad does not own any property or facilities at the crossing at issue.
The PUC rejected Norfolk's argument. It noted City of Chester was at odds with other appellate court cases. See, e.g., Greene Twp. Bd. of Supervisors v. Pa. Pub. Util. Comm'n, 668 A.2d 615 (Pa. Cmwlth. 1995) (pursuant to 66 Pa. C.S. §2704(a), PUC is vested with discretion to determine who shall bear the costs of relocation or abolition of a railroad crossing and the facilities adjacent to it; in exercising this authority, the PUC is not limited to any fixed method or formula with respect to the allocation of costs; it may take all relevant factors into consideration); Millcreek Twp. v. Pa. Pub. Util. Comm'n, 753 A.2d 324 (Pa. Cmwlth. 2000) (both the ownership and use of a rail-highway crossing are valid considerations when allocating costs and maintenance responsibilities for the crossing); Se. Pa. Transp. Auth. (SEPTA) v. Pa. Pub. Util. Comm'n, 592 A.2d 797 (Pa. Cmwlth. 1991) (hereinafter "SEPTA 1991") (SEPTA's ownership of bridge is not dispositive of the issue of responsibility for maintaining that property; "relevant factors" analysis used in apportioning costs for construction, relocation and alteration of rail-highway crossings, the only requirement being that the order is just and reasonable and supported by substantial evidence).
Given this Court's prior decisions, including SEPTA 1991 and Greene Township, the PUC reasoned City of Chester should not be read as controlling or precedential with respect to cost allocation and work assignments in rail-highway projects. PUC Op., 09/17/10 at 9.
Exception No. 2.
In Exception No. 2, Norfolk objected to the ALJ's Conclusion of Law No. 21, which provides:
21. The Amended and Restated Northeast Corridor Freight Operating Agreement (Operating Agreement) under which [Norfolk] makes payments to Amtrak for its use of the rail line at the Crossing area, does not qualify as a cost allocation agreement for purposes of 66 Pa. C.S. §2704. [R.R. at 551a.]
Although Norfolk concedes the Operating Agreement is not a cost allocation agreement, it argued the PUC should interpret it as encompassing all of Norfolk's cost for operating on the line, including the costs of demolishing and removing the Bridge.
The PUC rejected Norfolk's contention. Pursuant to 66 Pa. C.S. §2704(a), the PUC, after due notice and hearing, may apportion the costs for construction, relocation or abolition of rail crossings "unless such proportions are mutually agreed upon and paid by the interested parties." The PUC agreed with the ALJ that the Operating Agreement did not qualify as a cost allocation agreement under 66 Pa. C.S. §2704(a). The Operating Agreement does not specifically address cost allocation for demolition and removal of the Bridge. Also, there is no record evidence indicating either Norfolk or Amtrak paid any costs under the Operating Agreement specifically attributable to the Bridge removal project. Therefore, the ALJ properly determined the private cost agreement provision in 66 Pa. C.S. §2704(a) is inapplicable here. City of Phila. v. Phila. Elec. Co., 504 Pa. 312, 473 A.2d 997 (1984) (hereinafter "Philadelphia II"). PUC Op. at 11.
Exception No. 3.
In Exception No. 3, Norfolk objected to the ALJ's Conclusion of Law No. 29, which provides:
29. A just and reasonable allocation of the remaining final costs, based upon consideration of the factors set forth in Greene Township v. Pa. P.U.C., 668 A.2d 615 (Pa. [Cmwlth.] 1995), and Application of the City of Wilkes-Barre, Docket No. A-00101606, Order entered April 9, 1981, is a 70% allocation to the Township, a 15% allocation to the County, and a 5% allocation to [DOT]. [R.R. at 552a.]
When apportioning costs in rail-highway crossing cases, the general standard is that the PUC is not bound by a fixed rule; it takes all relevant factors into consideration. Greene Township. The only requirement is that the order be just and reasonable. Id.
Norfolk argued the ALJ did not consider the relevant factors listed in Greene Township. Primarily, the ALJ failed to adequately consider which party is most responsible for the deterioration of the crossing and thus the need for its removal. Norfolk asserted the Township is primarily, if not solely, responsible for the deterioration of the Bridge. Therefore, Norfolk argued the 15% allocated to it should be reallocated to the Township.
The PUC again rejected Norfolk's contention. It determined the ALJ, in assigning 70% of the project costs to the Township, sufficiently considered the extent of the Township's responsibility for the deterioration of the crossing. Moreover, in allocating 15% of the Bridge removal costs to Norfolk, the ALJ properly determined that Norfolk substantially benefited from both the existence and removal of the Bridge.
D. Norfolk I.
Norfolk petitioned for review of the PUC's order denying its exceptions and raised the three issues discussed above. In Norfolk Southern Railway Co. v. Public Utility Commission, (Pa. Cmwlth., No. 2157 C.D. 2010, filed December 1, 2011) (hereinafter "Norfolk I"), an unreported opinion, we agreed with Norfolk's position that our prior decision in City of Chester v. Pennsylvania Public Utility Commission, 798 A.2d 288 (Pa. Cmwlth. 2002), precluded the PUC from allocating a portion of the Bridge removal costs to Norfolk. Essentially, City of Chester held that it is the ownership of the rail line, rather than its usage, which places liability on a railroad for costs associated with the repair, replacement or removal of a rail-highway crossing. Consequently, we determined the PUC abused its discretion by allocating 15% of the removal project costs to Norfolk under 66 Pa. C.S. §2704(a).
E. Norfolk II.
The PUC appealed, and the Supreme Court ultimately held that Norfolk need not own any facilities at the rail-highway crossing in order to be a "concerned party" for purposes of the PUC's cost allocation jurisdiction and authority. The Court agreed with the PUC that "concerned party" status under 66 Pa. C.S. §2704(a) for transportation facilities, including railroads, does not turn upon an ownership litmus test. Therefore, the Supreme Court vacated our decision that the PUC could not allocate costs for the Bridge project to Norfolk under 66 Pa. C.S. §2704(a) using the multi-factor test set forth in Greene Township. These factors include, but are not limited to:
1. The party that originally built the crossing, and whether the roadway existed before the construction of the crossing;See also AT&T v. Pa. Pub. Util. Comm'n, 558 Pa. 290, 737 A.2d 201 (1999) (when allocating costs of constructing, removing or altering a rail-highway crossing, the PUC is not confined to any one rate or formula; it must consider all relevant factors).
2. The party that owned and maintained the crossing;
3. The relative benefit initially conferred on each party with the construction of the crossing;
4. Whether either party is responsible for the deterioration of the crossing resulting in the need for its repair, replacement or removal;
5. The relative benefit that each party will receive from the repair, replacement or removal of the crossing.
Ultimately, the Norfolk II Court remanded the case to this Court for consideration of the remaining two issues Norfolk raised in its challenge to the PUC's 2010 order: whether Norfolk's Operating Agreement qualifies as a cost allocation agreement under 66 Pa. C.S. §2704(a); and, whether the PUC's allocation of 15% of the costs for the Bridge removal project was just and reasonable in light of the circumstances of this case.
II. Discussion
A. Operating Agreement
1. Argument
On remand, Norfolk first contends the PUC erred in determining that Norfolk's Operating Agreement with Amtrak, pursuant to which Norfolk operates on Amtrak's rail line at the crossing, did not constitute a valid private cost allocation agreement as contemplated by 66 Pa. C.S. §2704(a), which would divest the PUC of jurisdiction to allocate Norfolk any costs for the Bridge removal. Norfolk's argument is as follows.
The last clause of 66 Pa. C.S. §2704(a) provides (with emphasis added) that the PUC will allocate costs for crossing projects "unless such proportions are mutually agreed upon and paid by the interested parties." A senior engineer for Norfolk, Thomas M. Bracy (Norfolk Engineer), testified that as of October 2009, Norfolk paid Amtrak approximately $1.37 per typical railroad car mile, and $1.67 per railroad car mile for heavier cars, under the Operating Agreement. R.R. at 148a.
Norfolk contends the payments it makes to Amtrak under the Operating Agreement are intended to cover Norfolk's fair share of all costs to operate on the line, including crossing maintenance. Norfolk asserts the Supreme Court made it clear that 66 Pa. C.S. §2704(a) divests the PUC of jurisdiction to allocate costs between interested parties where (1) the parties allocated the costs between themselves by contract, and (2) the parties actually paid those costs in accord with the terms of the contract. Philadelphia II. As such, the parties affected by rail-highway construction are encouraged to agree among themselves beforehand regarding the allocation of expenses. Id. If they do, the PUC is unauthorized to interfere with their agreement. Id.
Here, Norfolk asserts the ALJ incorrectly determined that in order to qualify as a cost allocation agreement under 66 Pa. C.S. §2704(a), the agreement must relate to a specific crossing project. Rather, the first sentence of 66 Pa. C.S. §2704(a) refers (with emphasis added): to "the construction, relocation, alteration, protection or abolition of any crossing ...."
Further, Norfolk's Operating Agreement and Freight Service Easement, when construed together, demonstrate Norfolk's payments to Amtrak were meant to account for its "fair and equitable share" of any crossing cost allocations, despite the fact the Operating Agreement does not refer to costs related to crossings generally or the specific Bridge removal project at issue.
See R.R. at 238a-40a.
As support for its position, Norfolk cites City of Philadelphia v. Pennsylvania Public Utility Commission, 449 Pa. 402, 296 A.2d 804 (1972) (hereinafter "Philadelphia I"), where several utilities entered into permit agreements with the City. The permit agreements granted the utilities permission to place their service lines in City streets in exchange for their agreement to pay the entire cost of relocating their facilities if required to do so by a public project. The permits did not refer to specific projects or cost allocations. Despite the lack of any project-specific references, the Supreme Court held these general permits to be valid cost allocation agreements for purposes of a cost allocation provision in the Public Utility Law of 1937, which was nearly identical to current 66 Pa. C.S. §2704(a). See also Yackobovitz v. Se. Pa. Transp. Auth., 590 A.2d 40 (Pa. Cmwlth. 1991) (this Court reviewed a lease agreement between the City and SEPTA and determined the parties intended that SEPTA, not the City, will cover all maintenance responsibilities for the street railway regardless of the fact that roadbed was not specifically set forth in the agreement's listed inventory).
Act of May 28, 1937, P.L. 1053, repealed by the Act of July 1, 1978, P.L. 920, as amended (the current Public Utility Code, 66 Pa. C.S. §§101-3316). --------
Norfolk further contends it made actual payments to Amtrak each month pursuant to the Operating Agreement. Norfolk intended these payments to cover its fair and equitable share of all operating costs, including cost allocations. Consequently, the present case is distinguishable from Philadelphia I and Philadelphia II, where no payments were made despite the permit agreements. See also AT&T (PUC allocation jurisdiction does not attach where there is a paid private cost allocation agreement).
Norfolk also argues that general rules and principles of Pennsylvania contract law make it clear that Norfolk's actual payment of its "fair and equitable share" of operating costs was meant to encompass any allocation costs the PUC could assign to Norfolk. The plain language of the Operating Agreement requires Norfolk to make a fixed monthly payment to Amtrak in exchange for use of the rail line. Nothing in the Operating Agreement indicates the parties intended that Norfolk additionally pay a portion of PUC cost allocations for the Bridge removal project.
Finally, although the Operating Agreement does not specifically mention the Bridge removal project, Norfolk argues the "doctrine of necessary implication" will imply an agreement to cover these costs. See Orbisonia-Rockhill Joint Mun. Auth. v. Cromwell Twp. Huntingdon Cnty., 978 A.2d 425 (Pa. Cmwlth. 2009) (in the absence of an express provision, the law will imply an agreement to perform those things that according to reason and justice they should do in order to carry out the purpose of the contract). In accord with Orbisonia-Rockhill and Yackobovitz, the doctrine of necessary implication would require the Operating Agreement to be read to cover all operating costs, including cost allocations for crossings. Thus, a proper reading of the Operating Agreement would result in a finding that Norfolk's payment covers the costs associated with removal of the Bridge. Therefore, the Operating Agreement qualifies as a cost allocation agreement for purposes of 66 Pa. C.S. §2704(a).
2. Response
In response, the PUC acknowledges that a private cost allocation agreement between the concerned/interested parties in a rail crossing project divests the PUC of jurisdiction to determine and allocate costs. AT&T. In order to divest the PUC of jurisdiction to conduct a cost allocation, the private agreement must: (1) be mutually agreed upon by all concerned parties; (2) allocate the costs at issue; and, (3) require that costs allocated be paid pursuant to the agreement. 66 Pa. C.S. §2704(a).
First, the PUC asserts, the Operating Agreement is not a mutual agreement between all concerned or interested parties in the allocation proceeding. Amtrak, the other party to the Operating Agreement, is exempt from the cost allocation for the Bridge removal and is not a party to this appeal. Moreover, the other actual interested parties, the Township, the County and DOT, all take the position that Norfolk's Operating Agreement with Amtrak did not qualify as a mutual agreement for cost allocation.
Second, Norfolk's Operating Agreement does not address the specific costs for the Bridge removal. Rather, Norfolk pays a set amount per mile to operate on Amtrak's line.
Third, Section 2704(a)'s references to "any crossing" and "such crossing" clearly refer to the crossing or crossings at issue in a particular cost allocation proceeding. As such, only a private cost allocation agreement material or related to the crossing or crossings at issue would obviate the need for a PUC allocation under 66 Pa. C.S. §2704(a).
Fourth, there is no evidence that either Norfolk or Amtrak paid any costs under the Operating Agreement specifically attributable to the Bridge removal. An agreement which is not an express agreement to pay the 66 Pa. C.S. §2704(a) costs at issue does not divest the PUC of cost allocation jurisdiction. Here, Norfolk's one-sided, self-serving interpretation of the Operating Agreement is insufficient to establish that Norfolk's monthly payments to Amtrak covered the costs at issue in the PUC's allocation of costs for the Bridge removal project.
3. Analysis
Norfolk's Operating Agreement fails to qualify as a private cost allocation agreement for purposes of 66 Pa. C.S. §2704(a), and cannot reasonably be interpreted as such, for several reasons. First and foremost, nowhere in the Operating Agreement does any party assume financial responsibility for the Bridge removal project. To the contrary, the Operating Agreement only references costs paid by Norfolk for three other rail-highway crossings in Lancaster. See Operating Agreement, Ex. D; R.R. at 245a. However, the Operating Agreement makes no mention of either the Bridge removal project or the PUC's allocation jurisdiction over that project. Therefore, the cost of the Bridge removal project is not a defined cost of operating rail service covered by the Operating Agreement.
Also, Norfolk cannot rely on the doctrine of necessary implication to defeat the express requirements in 66 Pa. C.S. §2704(a) that a private cost allocation agreement specifically address the crossing which is the subject of a PUC proceeding. In particular, the agreement must address allocation of the costs of the specific work performed at the crossing (construction, relocation, alteration, protection or abolition). AT&T; Philadelphia II. What is more, Amtrak is exempt under federal law from a cost allocation for the actual Bridge removal. Thus, it cannot be implied that Amtrak, in executing the Operating Agreement with Norfolk, intended to pay for the Bridge removal.
In addition, a private cost allocation must be mutually agreed upon by all interested parties. 66 Pa. C.S. §2704(a). Here, none of the other interested parties are signatories to the Operating Agreement. In short, the Township, the County and DOT did not agree that Norfolk's share of the costs for the Bridge removal project is 0%. As such, the PUC had jurisdiction under 66 Pa. C.S. §2704(a) to determine the percentage of costs assigned to Norfolk and the other parties for the Bridge removal project. AT&T.
Further, Norfolk made no payments specifically attributable to the Bridge removal pursuant to the Operating Agreement. In the absence of actual payment of project costs pursuant to an agreement, the PUC may allocate the project costs between parties. Philadelphia II.
In sum, neither the Operating Agreement itself, nor Norfolk's payments to Amtrak under the Operating Agreement, precludes the PUC from allocating costs of the Bridge removal project to Norfolk. AT&T; Philadelphia II. Therefore, we discern no error in the PUC's determination that the Operating Agreement fails to qualify as a private cost allocation agreement which would divest the PUC of cost allocation jurisdiction under 66 Pa. C.S. §2704(a).
B. Just and Reasonable Cost Allocation
1. Argument
Alternatively, Norfolk contends the PUC failed to make a just and reasonable cost allocation to Norfolk where: Norfolk does not own or lease any property or facilities at the crossing; Norfolk pays Amtrak an amount for all costs to operate on the line; Norfolk was not responsible for the deterioration of the crossing structure; and, the costs that could not be allocated to Amtrak were instead allocated to Norfolk.
In particular, Norfolk asserts the ALJ, in allocating costs, did not properly consider the relevant factors listed in Greene Township. Primarily, the ALJ failed to adequately consider which party was most responsible for the deterioration of the crossing and thus the need for its removal.
Norfolk asserted the Township was primarily, if not solely, responsible for the deterioration of the Bridge. For 23 years, the Township knew the Bridge, built in 1901, was in a state of deterioration. During that time, the Township did not invest in any improvements because it planned to eventually replace the Bridge. Norfolk also asserts the Township failed to apply for available state funding to remove the Bridge.
Moreover, Norfolk did not begin operating on the line until 1999. Thereafter, Norfolk had no rights regarding the Bridge or the technical ability to work on the Bridge because of Amtrak's electrification facilities.
Norfolk further argues the PUC wrongly allocated it costs simply because Amtrak, the owner of the line, cannot be allocated Bridge removal costs because of its federal exemption. Shifting those costs to Norfolk, which already paid Amtrak to operate on the line, is unjust and unreasonable where the Township bore primary responsibility for the Bridge's deterioration. Rather, Norfolk asserts the ALJ should have shifted Amtrak's share of the costs to Township, County and DOT because each benefited from Amtrak's service.
Therefore, Norfolk urges this Court to reallocate the PUC's 15% assignment of Bridge removal costs to the Township as the party responsible for the Bridge's deterioration. Alternatively, Norfolk requests a remand to the PUC for a reallocation of all or a portion of Norfolk's costs to the other interested parties.
2. Response
The PUC counters that the ALJ properly weighed the relevant factors in a cost allocation analysis under 66 Pa. C.S. §2704(a) and neither erred nor abused her discretion by assigning 15% of the Bridge removal costs to Norfolk. The PUC thus asserts the ALJ's allocations were just and reasonable, and were supported by the record.
The Township and DOT also assert that Norfolk, despite its lack of an ownership interest at the rail-highway crossing, received a substantial benefit from the existence and removal of the Bridge. Therefore, the PUC's 15% allocation of costs to Norfolk was just and reasonable, and should not be disturbed.
3. Analysis
We discern no abuse of discretion in the PUC's determination that the ALJ, in assigning 70% of the project costs to the Township and 15% to Norfolk, sufficiently considered the extent of the Township's responsibility for the deterioration of the Bridge. In her recommended decision, the ALJ made the following findings:
76. No party was able to identify who originally built the Crossing. Tr. 19, 111.
77. There is no evidence of record that any party other than the Township ever performed any maintenance on the Bridge.
78. The Township benefited from the Crossing as it provided a grade separation and safety enhancements to the public on a Township road, and thus alleviated some Township liability concerns. It also permitted unimpeded flow of traffic and provided another access way for residents in the area, thereby spreading out wear and tear on local roads. County St. No.1-D (revised), pp. 4-6, 8; County St. No. 1R, p. 6.
79. The Township benefited from enhanced rail passenger and freight transportation provided by the Crossing and from tourist revenue and real estate taxes paid by the businesses served by the railroad. County St. No. 1R, pp. 6-7.
80. After the demolition, the Township significantly benefited through removal of an unsafe condition on a Township road and alleviation of maintenance and closure policing responsibilities. County St. No. 1R, pp. 6-7.
81. [Norfolk] benefited from the Crossing while it was operational as it allowed unimpeded operation of [Norfolk's] freight rail service, thereby allowing [Norfolk] to serve its Lancaster customers. County St. No. 1-D (revised), p. 7; County St. No. 1R, p. 2.
82. [Norfolk] and Amtrak benefited from the Crossing while it was operational as it was a grade-separated crossing, which greatly reduced the risk of accidents
along the tracks. County St. No. 1-D, p. 7; County St. No. 1R, p. 4; Tr. 122-23.ALJ's Recommended Dec. at 17-18, R.R. at 488a-89a (emphasis added).
83. [Norfolk] and Amtrak benefited from the removal of the Crossing as removal eliminated the risk that the Bridge would collapse, disrupt operations, and result in liability for personal and property claims. County St. No. 1-D (revised), p. 7; County St. No. 1R.
The ALJ explained her allocation of costs to the Township and Norfolk as follows:
In my allocation recommendation, I have also considered that the Township, as the owner of the Bridge, was primarily responsible for its deterioration until it was ordered to be demolished in June 2003. Previous [PUC] Orders indicate that the Township performed safety measures through the years but did not significantly invest in improvements, probably because its plan was to eventually replace the entire Bridge. Therefore, the Township bore considerable responsibility for the need to remove the Bridge in 2003, and the costs associated therewith, but Amtrak exacerbated those removal costs due to its dilatory action.
* * * *
I have concluded a just and reasonable allocation to [Norfolk] is 15% of the remaining allocable costs, based upon record evidence that [Norfolk] realized the greatest benefit from the existence and removal of the Bridge, of the three remaining cost allocation-eligible parties. I note that the County also reached this conclusion in its alternative allocation recommendation, and the Township and [DOT] agreed that [Norfolk] benefited from removal of the Crossing.
The record establishes that [Norfolk] benefited operationally when the Crossing was in existence as it provided unimpeded movement of freight service for compensation and reduced the risk of accidents. [Norfolk] witness Thomas Bracey acknowledged the risk reduction associated with grade-separated crossings. [Norfolk] also benefited from demolition of the Crossing as it removed a potential hazard which could have disrupted operations, produced revenue loss, and resulted in liability for personal and property claims. Furthermore, [Norfolk's] use of the Crossing is not unsubstantial as it currently operates two local trains through the former Crossing area, five days a week to serve its various customers, as well as a separate train three days a week to serve Kellogg's.ALJ's Recommended Dec. at 72-73, R.R. at 543a-44a (citations omitted, emphasis added).
In accord with our Supreme Court's decision in Norfolk II, a weighing of the factors in the Greene Township test is appropriate, regardless of a railroad's lack of ownership interests at a crossing site. As the Supreme Court noted in Norfolk II, the ALJ determined Norfolk enjoyed substantial benefits from the Bridge during its existence "because the structure had facilitated the unimpeded movement of freight over the rail line Norfolk used and eliminated the increased risks of accidents associated with at-grade crossings." Norfolk II, ___ Pa. at ___, 77 A.3d at 622. The Supreme Court further noted "[t]he ALJ also observed that Norfolk benefited from the bridge's removal, since its deteriorated condition threatened the safety of personnel and property and presented a potential source of disruption of railroad operations." Id.
As discussed above, the Greene Township factors include the relative benefit initially conferred on each party with the construction of the crossing; and the relative benefit that each party will receive from the repair, replacement or removal of the crossing. Here, Norfolk substantially benefited from both the existence and removal of the Bridge.
In light of Norfolk's continued daily usage of Amtrak's rail line, we conclude that the PUC's allocation of 15% of the Bridge removal project to Norfolk was supported by the record, and was just and reasonable in light of the substantial benefits Norfolk received from the existence and removal of the Bridge. Norfolk II; AT&T; Greene Township.
III. Conclusion
For the above reasons, we discern no error or abuse of discretion in the PUC's final order dismissing Norfolk's exceptions to the ALJ's recommended decision and allocating to Norfolk 15% of the total project cost of the Bridge removal. Accordingly, we affirm.
/s/_________
ROBERT SIMPSON, Judge ORDER
AND NOW, this 14th day of April, 2014, the order of the Pennsylvania Public Utility Commission is AFFIRMED.
/s/_________
ROBERT SIMPSON, Judge