CP: Battle With USDOD Over NY Nuke Facility Spur

STB Orders Mediation to Determine Service and Sale Terms of Spur and Transload Serving Naval Nuclear Propulsion Training Site, Currently in the Middle of a Four-Year $1.5 Billion Refueling Operation.

18 June, Ballston Spa NY –  With unusual haste following the 30 April filing of a Joint Petition for Declaratory Order by The Naval Nuclear Propulsion Program, the United States Army Military Surface Deployment and Distribution Command, and Fluor Marine Propulsion, LLC (collectively the “Government”), the STB has ordered that CP and the petitioners to engage in a 30-day mediation effort to resolve the regulatory status and common carrier service requirements of the (former) Delaware & Hudson Ballston Spa Industrial Track (BSIT), in Ballston Spa, NY {STB Decision Docket} .

The 0.56 – mile BSIT spur is owned by CP, and is a designated Off-post Defense Connector line of the Strategic Rail Corridor Network (STRACNET) as a vital link to the line’s sole shipper, the Kenneth A. Kesselring Naval Reactors Laboratory Field Office training site in nearby West Milton, NY.

Upstate New York

Strategic Rail Corridor Network routes in upstate New York. The BSIT is designated as an Off-post Defense Connector line by the Navy.

Since October 2017, the BSIT and in particular the 430-foot “End Segment” has been active in preparation and support for a high-priority strategic overhaul and refueling operation of the S8G nuclear reactor at Kesselring. The operation is scheduled to conclude in 2021. The track had last been used for cargo in 2004 (in support of Kesserling), and the last reactor overhaul/refueling operation concluded in 1994.

An elemental disagreement

The dispute between CP and the Government centers on a desired sale of the BSIT by CP to the Government. At issue are the regulatory status of the BSIT, what service obligations CP currently has and will have after a sale, and the legal structure of any prospective sale. Also at issue are whether CP’s pursuit of a sale within a short time-span is imposing unacceptable risks upon the Kesselring overhaul operation, and to the future viability of the training facility.

The Government’s Petition primarily asserts that, 1. Since the Government informed CP in 2013 of its intent to use the BSIT for the Kesselring operation, CP has predicated negotiation for and provision of service on CP’s own expectation of a rapid acquisition of the line by the Government, and 2. That while the sale negotiations continue, CP has avoided assuring continued service to the transload site for the duration of the Kesselring operation, and 3. That CP is misrepresenting the status of the track in order to avoid common carrier conventions during the current operation and following any sale of the line.

The 366-page Petition, designated as the Government’s entire case-in-chief, asks the Board to resolve these issues by declaring for the Petition’s arguments:

  1. [That] the End Segment is a regulated line,
  2. [That] CP is obliged to provide common carrier rates and to transport the Government’s regulated commodity shipments over the End Segment upon reasonable request, and has a corollary common carrier obligation to allow the Government reasonable access to the End Segment to transload its freight,
  3. [That if, following a sale of the BSIT to the Government], the End Segment is or becomes a non-regulated rail line, CP’s common carrier obligation to place the Government’s cars on the End Segment continues.

Anticipating that the current Kesselring overhaul operation may be placed in jeopardy based on the existing access agreements with CP, or that the NNPP will be substantially harmed1 without a quick and favorable declaration by the Board on these matters, the Government emphasized its request for expedited action included on the Petition by also filing a Joint Motion for Procedural Schedule {STB #XXX}.

The dispute over the BSIT End Section’s regulated status revolves around a 1980 Abandonment Case initiated by D&H, which was ultimately amended to abandon only the “upper” half of the then-1.3-mile BSIT, while the current 0.56-mile BSIT was retained as active line, despite the fact that even by then, the Government was the line’s only shipper. Certain discrepancies between the documentary record of that case and the existing visible indicia are held by CP and the government to prove their position. {Petition, Reply; map }

Over a barrel?

The Petition also describes what the Government considers to be strong-arm tactics by CP in its efforts to expedite the sale of the line, exploiting the urgent and strategically vital nature of the S8G overhaul operation to force the Government’s accession to extraordinary agreements and inadequate terms regarding access and use of the line for the Kesselring operation.

On 10 October 2017, with shipments of unloaded containers scheduled to begin in Spring 2018, the Government signed the Permission to Enter Premises, Release and Agreement to Insure (PRA) agreement with CP. The necessary track improvements to handle the extremely heavy shipments 2 were completed by December 2017 at a cost to the Government of $309,000. The Petition implies that the Government signed the PRA with the understanding that CP would serve the entire BSIT according to common carrier conventions until the Kesselring operation was completed, even while the operating status of the line was in dispute, and regardless of the success, failure, or continuation of the sale prospect during the operation.

Based on the PRA, the Government initiated the transportation phase of the Kesselring overhaul operation as scheduled, and prepared for the first sequence of shipments of unloaded core containers (to be loaded on a later date at Kesselring with decommissioned radioactive cargo, and railed to appropriate sites).

The first shipment of the 12 total specified in the operation plan (six in, six out), an oversized empty container that weighed approximately 160 tons, was scheduled to arrive in early June. On 9 May 2018, while this cargo en route from Idaho via UP and NS, CP presented the Government with the Access Agreement , that imposed new restrictions over the terms of the PRA. In particular, the Access Agreement limits permissible transloading to only cars carrying empty NNPP containers 3 ( thereby agreeing to service the then-imminent arrival of empty containers already en route, but casting doubt upon loaded shipments of radioactive material scheduled to arrive late 2019/early 2020 — Ed. ). The government signed the AA under protest; the first shipment arrived in Ballston Spa on 8 June 2018, and was unloaded.

Ballston Spa, NY

DODX railcar M-140 carrying 160-ton empty reactor core cask arrived off the main line on 08 June 2018. Transfer of each shipment to the Kesselring site is a three-day operation: Day 1, Deliver rail car to transload; Day 2, Transfer shipment from the railcar to the Heavy Haul vehicle; Day 3, Transport the shipment from the BSIT transload to the Kesselring Site via public roads.

 

The first shipment arrived and unloaded; the cask has been removed from the railcar. The transload and several other sites along the BSIT were substantially rehabilitated or upgraded to manage the extreme loading demands. There will be 12 movements in all, Six in and six out by 2021 {Google Earth}.

 

Ballston Spa -West Milton, NY

After transloading an incoming load from the DODX railcar to the heavy-haul vehicle, the vehicle will travel approximately eight miles along a pre-surveyed route to the Kesselring Site. Travel speed is approximately five MPH, and the shipment is accompanied by DOD/NNPP couriers, and escorted by local and State Police, with observation by NYDOT, and other local and regional officials. {Naval Nuclear Laboratory press release}.

CP’s Reply to the Petition

In its 31 May Reply to the Government’s Petition, CP rebuts the Government’s assertion that the End Segment is regulated track. CP asserts that the End Segment is a vestigial siding that “is not now and never was a line of railroad” {Reply, p.13}, i.e, never part of a prior D&H through-line that extended to Saratoga Springs. For that reason, CP considers the End Segment to be unregulated, and exempt from common carrier service requirements; CP has no regulatory obligation to provide common carrier service to the End Segment, and never will no matter who owns the track. In its Reply, CP consistently expresses intent to serve the End Segment following a BSIT sale to the Government according to a standard Private Siding Agreement.

The Reply asserts that CP received notification in 2017 from the Government of its intent to undertake the Kesselring overhaul, and its plans to move 12 shipments over the BSIT. The Reply includes explanations that the extraordinary agreements (PRA, AA) were made necessary by the slow pace and uncoordinated nature of the Government’s responsiveness in the negotiations toward a sale. The Reply points out that, apart from occasional storage of its own ROW equipment, the BSIT is used by only one customer — the Government — and then with a frequency measured in decades. From CP’s point of view, the BSIT provides nothing but incalculable liability in the event of a nuclear-oriented mishap, and that they would prefer the government to take full responsibility for the property as soon as possible — and preferably before radioactive cargoes arrive later this year.

Significance of Kesselring

Kenneth A. Kesselring Naval Reactors Laboratory Field Office is the primary training facility for USN nuclear reactor operators, and has been the home of the S8G Land-Based Prototype reactor since 1978. The first power plant at the Kesselring Site went into operation in 1955. This and three subsequent power plant prototypes were later decommissioned because more modern platforms were developed. An advanced test platform – the MARF prototype – was placed in service at the Kesselring Site in 1976 and, in 1979, the S8G prototype for the Ohio -class ballistic missile submarines was placed in service at the Kesselring Site. These two operating power plants remain at the Kesselring Site today. In 1994, the S8G was overhauled to operate with the S6W SSN-21 Seawolf -class Advanced Fleet Reactor Core.

The current overhaul will refit the reactor to operate with the new Technology Demonstration Core, which is the training version of the core being fitted to the SSBN-X Columbia -class ballistic missile submarine, which will begin to replace the current Ohio-class submarines in 2030. The Columbia program is the USN’s number one strategic acquisition priority {Statement of Adm. James F. Caldwell Deputy Administrator for Naval Reactors National Nuclear Security Administration U.S. Department of Energy Statement}.


1 “Any delays caused by the Government’s failure to receive loaded container cars on schedule can cost the Government up to $800,000 per day and undermine national security interests because “[f]or every week or partial week of delays [the Government] incurs in returning the prototype to student training, the Navy fleet suffers a loss of approximately 20 nuclear-trained sailors.” {Petition, Trautman Verified Statement}

2 The heaviest shipment will weigh more than 300 tons. {Petition, Trautman Verified Statement}

3 AA Article 2.1.: “For clarity and the avoidance of doubt, the parties expressly acknowledge and agree that this license does not permit the presence of loaded shipping containers containing Products (radioactive cargoes) or a loaded heat exchanger anywhere on the Access Area, or the loading and/or unloading of rail cars with a loaded heat exchanger or with loaded shipping containers containing Products” {Access Agreement}.