The California Public Utilities Commission (CPUC) today announced
its support of the proposed merger of the Union Pacific and Southern Pacific railroads.
The CPUC's formal comments will be filed with the federal Surface Transportation Board
(STB) tomorrow. While supporting the merger, the Commission noted that the consolidation
of these two railroads would represent a major realignment of rail transportation in
California that could result in improved service and have a positive economic impact on
the state, but expressed its concern about the possible impact on competition and service
on certain railroad routes or corridors. The areas of most concern are the central
corridor which carries freight shipments between the Midwest and the San Francisco Bay
Area; the I-5 corridor which parallels Interstate 5 from Los Angeles to Seattle, and the
southern corridor which covers routes from Los Angeles through the Southwest. At present,
three major freight railroads serve the state, the Union Pacific, the Southern Pacific,
and the Burlington Northern/Santa Fe. The STB will make the final decision on the merger
this summer. Other parties will also be commenting on the merger and the CPUC will respond
to those statements at a later date.