0010 1 BEFORE THE WASHINGTON 2 UTILITIES AND TRANSPORTATION COMMISSION 3 ____________________________________________________ 4 WASHINGTON UTILITIES AND ) TRANSPORTATION COMMISSION, ) 5 ) ) 6 Complainant, ) Docket TR-150284 ) 7 v. ) ) 8 BNSF RAILWAY COMPANY, ) ) 9 Respondent. ) _______________________________________________ 10 HEARING ON SETTLEMENT PROPOSAL, VOLUME II 11 Pages 10 - 100 12 ADMINISTRATIVE LAW JUDGE GREGORY J. KOPTA 13 _______________________________________________ 14 1:33 P.M. 15 OCTOBER 19, 2015 16 Washington Utilities and Transportation Commission 17 1300 South Evergreen Park Drive Southwest Olympia, Washington 98504-7250 18 19 20 REPORTED BY: SHERRILYN SMITH, CCR# 2097 21 Buell Realtime Reporting, LLC 1325 Fourth Avenue 22 Suite 1840 Seattle, Washington 98101 23 206.287.9066 | Seattle 360.534.9066 | Olympia 24 800.846.6989 | National 25 www.buellrealtime.com 0011 1 A P P E A R A N C E S 2 ADMINISTRATIVE LAW JUDGE: 3 GREGORY J. KOPTA Washington Utilities and 4 Transportation Commission 1300 South Evergreen Park Drive SW 5 PO Box 47250 Olympia, Washington 98504 6 360.664.1136 7 COMMISSIONERS: 8 CHAIRMAN DAVID W. DANNER 9 COMMISSIONER ANN E. RENDAHL 10 COMMISSIONER PHILIP B. JONES 11 12 FOR COMMISSION STAFF: 13 JULIAN BEATTIE Office of the Attorney General 14 Utilities and Transportation Division PO Box 40128 15 1400 South Evergreen Park Drive SW Olympia, Washington 98504 16 360.664.1225 jbeattie@utc.wa.gov 17 18 FOR BNSF RAILWAY COMPANY: 19 P. STEPHEN DiJULIO Foster Pepper, PLLC 20 1111 Third Avenue Suite 3400 21 Seattle, Washington 98101 206.447.8904 22 dijup@foster.com 23 -o0o- 24 25 0012 1 OLYMPIA, WASHINGTON; OCTOBER 19, 2015 2 1:33 P.M. 3 -o0o- 4 5 JUDGE KOPTA: Let's be on the record in 6 Docket TR-150284, entitled Washington Utilities and 7 Transportation Commission versus BNSF Railway Company. 8 We are here on Monday, October 19th at 1:30 p.m., for 9 a hearing on the settlement agreement between 10 Commission Staff and the Company. 11 I am Gregory Kopta, the administrative law 12 judge who is assigned to this case, and presiding with 13 me on the bench today are Chairman David Danner and 14 Commissioners Philip Jones and Ann Rendahl. Our 15 purpose today is to allow the Commissioners to ask 16 questions and for the parties, if they wish to say 17 anything more about the agreement, to explain to the 18 Commission why it is in the public interest and should 19 be adopted as the resolution of this case. 20 First we have several witnesses that are 21 available for providing testimony, so I will swear you 22 all in. If you would stand and raise your right hand. 23 24 25 0013 1 BETTY YOUNG, DAVE PRATT, JOHAN HELLMAN, COURTNEY 2 WALLACE, JERALD COMPTON, having been first duly sworn 3 on oath testified as follows: 4 5 JUDGE KOPTA: All right. Let's identify 6 each witness for the record before we begin. We will 7 start to my immediate left. 8 MS. YOUNG: Betty Young, Utilities and 9 Transportation Staff in Transportation Safety. 10 MR. PRATT: Dave Pratt, Commission 11 Staff. 12 MR. HELLMAN: My name is Johan Hellman, 13 I am the Executive Director of Government Affairs for 14 BNSF Railway Company in the Pacific Northwest. My 15 area includes Washington, Oregon, and 16 British Columbia. 17 JUDGE KOPTA: If you would use the 18 microphone, too, please. 19 MS. WALLACE: Courtney Wallace, Regional 20 Director of Public Affairs for BNSF for the 21 Pacific Northwest. 22 JUDGE KOPTA: And our last witness. 23 MR. COMPTON: Jerald Compton, 24 J-E-R-A-L-D. I am the EOC manager with Washington 25 State Emergency Management Division, and I am the lead 0014 1 for the 24/7 warning center. 2 JUDGE KOPTA: Thank you very much. 3 And while we were identifying folks, how about 4 appearances from the attorneys. We just need name, 5 firm and company that you are representing. 6 Let's begin with BNSF. 7 MR. DiJULIO: Thank you. This is Steve 8 DiJulio, Foster Pepper, representing BNSF, respondent, 9 in TR-150284. 10 JUDGE KOPTA: Thank you. 11 And for Commission Staff. 12 MR. BEATTIE: Julian Beattie, Assistant 13 Attorney General, representing Commission Staff. 14 JUDGE KOPTA: Thank you. 15 Anyone else wishing to make an appearance? 16 Hearing none, we are ready to proceed. 17 Unless anyone has any kind of opening remarks, 18 then I will immediately go to Commissioner questions. 19 Hearing nothing, Mr. Chairman, would you like 20 to begin? 21 CHAIRMAN DANNER: Thank you. I would. 22 Thank you all for being here this afternoon. 23 Well, let me start by saying that the 24 settlement and the narrative supporting the settlement 25 agreement were, I have to term them a bit of a black 0015 1 box. I was trying to understand what went into it, so 2 I very much appreciate the response to the Bench 3 Request No. 1. That filled in a lot of my 4 understanding of what has been going on. 5 It seems I -- there's three things that I see 6 here. One is that there's questions about the -- 7 when -- when calls were made to the EOC as required by 8 our rules, and then some legal questions about who was 9 responsible when a train was on shipper's property as 10 opposed to on the tracks, and then last is a question 11 about responsibilities when the fuel that leaks is 12 fuel, as opposed to -- or when the oil that leaks is 13 fuel, as opposed to a commodity. 14 So I guess let me start by asking some 15 questions around the reporting to the EOC. From what 16 I understand, a request was made to EOC when we 17 were -- when our staff was doing its investigation. 18 They were looking at when -- were phone calls made to 19 the EOC, when were they made, were they in compliance 20 with our rules for a 30-minute time line. In some 21 cases the calls were made, although not perhaps within 22 30 minutes. 23 The original information we received from EOC 24 was that they were not received and then later that 25 was changed. I am just wondering what the process is 0016 1 at EOC. When they receive calls of this sort, how are 2 they generally handled? 3 Mr. Compton, let me ask you that. 4 MR. COMPTON: When a HAZMAT call comes 5 in to the EOC, records from BNSF or any other person, 6 we will take that call, take all the pertinent 7 information, basically containing what was spilled, 8 how much was spilled, where was it spilled, and a 9 little bit of information about what occurred to cause 10 the spill, when it occurred, and then we will record 11 at that point the date and time of the call that we 12 received. 13 That information primarily goes to the 14 Department of Ecology and to the local jurisdiction. 15 In specific cases, such as railroad incidents, we also 16 generate an e-mail to the Utilities and Transportation 17 Commission, basically outlining all of that 18 information as well. If it would be something on I-5, 19 we would notify WSP, because they have specific 20 jurisdiction there. So there are some ancillary 21 notifications that we will make. 22 CHAIRMAN DANNER: Is this -- the 23 reporting to the UTC, is there some form of memorandum 24 of understanding or memorandum of agreement that you 25 have with our agency? What is -- what is the backdrop 0017 1 for this activity? 2 MR. COMPTON: We operate based on an 3 established set of standard operating procedures. 4 Those are in writing at the Alert and Warning Center. 5 In the cases of all of our partners, we coordinate 6 with them as to what kind of information they need 7 regarding specific incidents that may occur. Those 8 are incorporated into those standard operation 9 procedures. 10 CHAIRMAN DANNER: Okay. So there is no 11 memorandum of agreement with the UTC, but there is 12 standard operating procedures. 13 And I haven't seen those. Are those something 14 that you could provide to us or -- 15 MR. COMPTON: Absolutely. 16 CHAIRMAN DANNER: -- that our staff has? 17 Do you have -- Mr. Pratt, do we have those? 18 MR. PRATT: (No verbal response.) 19 CHAIRMAN DANNER: Okay. That would be 20 helpful, if you could get those to us. 21 MR. COMPTON: When would you like them? 22 CHAIRMAN DANNER: Well, let me -- I will 23 work through the Judge. Maybe this will be a bench 24 request. 25 JUDGE KOPTA: Yes, this will be Bench 0018 1 Request, actually, No. 3, since we have two other 2 bench requests. 3 When do you think you would be able to get 4 those to us? 5 MR. COMPTON: I can have them in e-mail 6 within the next 15, 20 minutes. 7 JUDGE KOPTA: By the end of tomorrow. 8 We will give you even more than 15 minutes. That 9 would be great. Thank you. 10 MR. BEATTIE: Judge Kopta, this is 11 Julian Beattie, Counsel Staff. Just for clarity of 12 the record, EOC is not a party to this proceeding. 13 CHAIRMAN DANNER: Thank you very much 14 for clarifying that. I do know that. I am just 15 trying to develop a chronology of events here. 16 MR. COMPTON: One more question. Who do 17 I send that to? 18 JUDGE KOPTA: You would send it to our 19 records center, UTC.wa.gov -- records@UTC.wa.gov. 20 MR. COMPTON: Records@ UTC.wa.gov. 21 JUDGE KOPTA: Yes. And address it to 22 Steve King, executive director and secretary. 23 MR. COMPTON: Very good, sir. 24 JUDGE KOPTA: Thank you. 25 CHAIRMAN DANNER: Mr. Compton, when you 0019 1 first responded to inquiries from our agency, or when 2 your agency did, I should say, it was communicated to 3 us that the -- either that the calls didn't happen or 4 there -- there seemed to be some misunderstanding. I 5 was just wondering when those calls came in to you, 6 the ones for example, let me see here, on -- I have 7 the date here -- on 12/09 at -- so December 9th you 8 would have received some -- some calls, and what -- 9 how would those have been responded to? 10 MR. COMPTON: In some cases we received 11 these via phone call. In other cases we received them 12 via a hard copy report from the National Response 13 Center. In most of the cases we expect to receive 14 both, a phone call and a report. 15 We will receive one of those first, then we 16 will act on that, whichever ones come in first. So if 17 it is a phone call, we will page out; if it's after 18 hours, we will page out the Ecology responder, provide 19 the information to them. And then if we get an NRC 20 following after the fact, we will forward that to them 21 via e-mail as well. The same thing with the local 22 jurisdiction. 23 As far as our notification to the Utilities 24 and Transportation Commission, we will generate an 25 e-mail summary of the event and send it to them. 0020 1 COMMISSIONER RENDAHL: You used the term 2 RC, what is -- I think I heard you -- 3 MR. COMPTON: Oh, NRC. National 4 Response -- 5 COMMISSIONER RENDAHL: NRC. Thank you. 6 CHAIRMAN DANNER: And so did that happen 7 in all cases with the -- with the calls that were made 8 from BNSF to the EOC, in the incidents that we have 9 under review today? Are you aware of some that may 10 have been called in or e-mailed to your agency, but 11 that were not then communicated with the UTC? 12 MR. COMPTON: I do have the records on 13 each one here. All of the information that we 14 provided to the UTC, I have a copy of with me today. 15 There is unfortunately a human element involved, 16 especially when we are talking about after hours. As 17 it gets later in the day, people's minds get a little 18 cloudier. 19 It is also a fact that we are not handling 20 just hazardous material spills, but a number of other 21 spills, or a number of other types of events, such as 22 weather events and other things that are going on in 23 the state. And so I will admit that there are times 24 where our duty officers will slide on a particular 25 notification that they should, by SOP, accomplish. 0021 1 In regards to the specific -- was it 2 December the 9th? 3 CHAIRMAN DANNER: Well, I'm looking at 4 one, for example, on Attachment 8 to the Bench -- to 5 Bench Request No. 1. 6 COMMISSIONER RENDAHL: Do you have that 7 bench request response? 8 MR. COMPTON: I have it in my e-mail, 9 but I don't have it before me. 10 COMMISSIONER RENDAHL: Mr. Beattie, do 11 you have a copy with you that you can share? 12 MR. BEATTIE: Commissioner Rendahl, I 13 don't have a clean copy. 14 COMMISSIONER RENDAHL: Okay. All right. 15 MR. DiJULIO: (Complies.) 16 CHAIRMAN DANNER: Again, I am not 17 looking to go event by event, I'm just -- I'm just 18 trying to get a sense of -- there were some that 19 apparently fell through the cracks. I am trying to 20 understand when it was determined that they fell 21 through the cracks and how did it get communicated to 22 the UTC that there had been no calls made. 23 MR. COMPTON: Okay. This particular one 24 that I am looking at was opened at 17:16. Just a 25 moment. 0022 1 All right. So on this particular one, it was 2 received at 5:16 in the afternoon. It was a 3 notification of an occurrence that happened at 10:45 4 that day in Vancouver. On the back of each report -- 5 this one only contains the front, but on the back of 6 it, it has a record of the notifications that were 7 made. I do see here that no notification to the UTC 8 was made or documented, on the reports that I have 9 here in front of me. 10 CHAIRMAN DANNER: So how is it that we 11 received -- in response to our inquiries, that no 12 calls had come in? 13 MR. COMPTON: This particular one here, 14 there is no call listed on it. It was an NRC-only 15 report. 16 CHAIRMAN DANNER: Okay. And when was it 17 discovered that a call had come in? 18 MR. COMPTON: I don't see any 19 documentation here that a call did come in. 20 This may be one that I discussed with 21 Mrs. Young a short time ago via e-mail, in which they 22 have records, phone records, of an actual call. That 23 call was not documented on the paperwork. 24 CHAIRMAN DANNER: Okay. So that would 25 have been brought to your attention, then, by 0023 1 Burlington Northern? 2 MR. COMPTON: It was, in fact, brought 3 to my attention by Ms. Young. 4 CHAIRMAN DANNER: By Ms. Young. Okay. 5 And so we can assume in that instance that a 6 call was made and no record was made of the call? 7 MR. COMPTON: I believe that that would 8 be the case. 9 CHAIRMAN DANNER: Okay. 10 And then can you tell me what steps have been 11 made to ensure that we are not going to continue to 12 have things fall through the cracks? 13 MR. COMPTON: Both myself and the EOC 14 supervisor, my supervisor, have sat with the duty 15 officer team and reinforced the importance -- the 16 legal importance of the work that we do in the Alert 17 and Warning Center. 18 The best we could do is basically reinforce 19 what the SOP states. It's very plainly stated in 20 there what notifications we have to make, including 21 those to the UTC. It's very plainly stated how we 22 record what we need to document. When a slip-up is 23 made, all we can do is address that with that 24 individual duty officer. 25 CHAIRMAN DANNER: Is the desk staffed 0024 1 24/7? 2 MR. COMPTON: It is. 3 CHAIRMAN DANNER: Okay. So it really 4 shouldn't matter what time of day a call comes in -- 5 MR. COMPTON: That's correct. 6 CHAIRMAN DANNER: -- somebody is there. 7 MR. COMPTON: That's correct. 8 Another -- sometimes it can be an issue, is we 9 do have two duty officers. If we have a number of 10 calls that come in, and they do tend to come in large 11 clumps, clusters, and one handles the actual call 12 regarding a particular spill and the other one picks 13 up a call that is related to that spill and jots down 14 information. Another thing that I have been trying to 15 reinforce with them is the communication back and 16 forth between the two duty officers on duty at any 17 given time. It's so important that that -- that call 18 that the second duty officer receives gets documented 19 on the original documents, which the other duty 20 officer actually has possession of. So there is some 21 slip-ups that can occur in that regard. 22 CHAIRMAN DANNER: So what comfort can 23 you give to the Commission and to the public that 24 we've got this under control and that when calls come 25 in, they are not -- I mean I know you are dealing with 0025 1 Oso and bridges going down and every other thing. How 2 can I be sure that in the future, that when these 3 calls come in, they are going to be processed, as you 4 have laid out in your SOP? 5 MR. COMPTON: It is a major point of 6 emphasis to the duty officers in regards to the legal 7 ramifications of the work that we do in that office. 8 It is constantly reinforced. In fact, an e-mail went 9 out to them in regards to this hearing as a 10 reinforcement. 11 All we can do is continue to monitor them and 12 receive information and feedback from our partners in 13 regards to anything that is occurring that seems to be 14 not according to that SOP. 15 CHAIRMAN DANNER: Okay. 16 And then under your SOP you also notify 17 Ecology when there is a spill? 18 MR. COMPTON: They are the primary party 19 that we notify, yes. 20 CHAIRMAN DANNER: Okay. All right. 21 Well, thank you very much. I appreciate your 22 attention to this matter, so that we make sure we 23 have -- the SOP is followed and that we -- we have the 24 information that we need, because we do rely on the 25 EOC for that information. 0026 1 JUDGE KOPTA: I would like to follow up 2 on a couple of questions, if I might. 3 So you said that something did come in either 4 by telephone or by some other means. What is the 5 other means it might come in? 6 MR. COMPTON: The National Response 7 Center sends us reports via fax and e-mail. 8 JUDGE KOPTA: Okay. 9 MR. COMPTON: We will receive it -- 10 usually, those two come in simultaneously. It makes 11 for an easier reporting process. We can forward the 12 NRC to the UTC and other partners. 13 JUDGE KOPTA: Does every call have both 14 a phone call component and another component? 15 MR. COMPTON: No. 16 JUDGE KOPTA: Is there any record of 17 phone calls, other than a live person jotting it down? 18 MR. COMPTON: Well, it does get recorded 19 upon the forms for each incident. 20 JUDGE KOPTA: But it is a person that 21 actually is on the phone and jots that down, there's 22 no recording of the telephone call? 23 MR. COMPTON: There are recordings. At 24 this point in time our recording system has a few 25 technical glitches to it, but we can definitely see if 0027 1 we can recover phone calls, if you have a particular 2 one in mind. 3 JUDGE KOPTA: No, I was just wondering 4 what kind of record, other than a human being writing 5 something down. Is there any requirement for a 6 confirming e-mail after a telephone call? 7 MR. COMPTON: A confirming e-mail to 8 who? 9 JUDGE KOPTA: From the person who made 10 the phone call to the person who received it, just to 11 say, Following up on our conversation, here are the 12 details, or -- 13 MR. COMPTON: No requirement. 14 JUDGE KOPTA: Is that something that you 15 have considered doing? 16 MR. COMPTON: Well, there's not a lot we 17 can do to require a commercial entity to do anything 18 beyond what they decide they are going to do in 19 regards to reporting. They have specific legal 20 requirements for reporting spills to us. As far as 21 the administrative piece behind there, I am not aware 22 of anything that would give us any kind of leverage to 23 require them to do more than make the call. 24 JUDGE KOPTA: So from your 25 understanding, what is the obligation of a private 0028 1 entity, just either a phone call or through the NPC? 2 MR. COMPTON: I don't know the 3 particulars of the law. I do know that companies that 4 handle hazardous materials are required to report 5 spills of those materials. Our number is published on 6 the Department of Ecology website as a primary. 7 During the day, our primary thing is 8 waterborne spills. Those are required by law to come 9 to the Alert and Warning Center. We don't -- we also 10 accept other types of spills during the day as well, 11 and provide that information on to the Department of 12 Ecology. We really don't take on the full 13 responsibility of that until after the five o'clock 14 hour, when the Department of Ecology closes. At that 15 point, we become their answering service. We have a 16 list of responders for each of their four regional 17 offices that are on call for any given day. When we 18 receive a call, we notify them and pass it on to them, 19 as well as, as I said earlier, the local jurisdiction 20 and any ancillary partner, such as the UTC. 21 JUDGE KOPTA: Okay. Thank you. 22 CHAIRMAN DANNER: Mr. Compton, when the 23 desk receives a call, how quickly do you turn that 24 around and notify the UTC or the Department of 25 Ecology? 0029 1 MR. COMPTON: Our requirement to the 2 Department of Ecology is within 25 minutes. Normally, 3 it's between 5 and 10 minutes of hanging up that phone 4 that we are speaking with them. 5 CHAIRMAN DANNER: Okay. 6 MR. COMPTON: And it depends on how 7 quickly they get back to us. The system for 8 notification of them, especially after hours, is a 9 pager system. We page them out, wait for their call 10 back. If we don't hear from them within ten minutes, 11 repeat the page. We do have a backup for each 12 regional office as well. If we cannot reach the 13 primary within 15 minutes or so, we will go to the 14 backup. 15 CHAIRMAN DANNER: And what about the 16 UTC? 17 MR. COMPTON: The UTC has required us -- 18 or not required, but they have asked us to basically 19 keep them informed via e-mail. There is no call-out 20 process for them or anything, unless there is 21 something really significant that occurs. Now, that's 22 somewhat subjective. And if something amazingly large 23 occurs, standardly I will get a call as well, because 24 there is a potential of activation of the EOC. 25 CHAIRMAN DANNER: All right. 0030 1 So let me ask Mr. Pratt, then. So there's a 2 requirement that calls be made within 30 minutes from 3 the Railroad to the EOC. The EOC then turns around 4 and contacts you. Generally e-mail, but if a, quote, 5 really significant event occurs, then they will 6 contact you by phone. The 30-minute deadline suggests 7 that time is of the essence. It seems that time is 8 important. So when a call comes to the UTC, whether 9 it's an e-mail or a telephone call, what is our 10 standard operating procedure? 11 MR. PRATT: Okay. As Mr. Compton said, 12 I think that primarily will depend upon the 13 seriousness of the call. The issue we are talking 14 about here, about hazardous materials releases, 15 generally our job there is to be made aware of them, 16 to understand. 17 Because Ecology is the responding agency, one 18 question -- it's really not even a question, one 19 statement they make to me during those calls, or in 20 e-mail, is that Ecology was notified. That's my 21 primary concern there, if there's a spill that Ecology 22 knows about it, that they are on track. Our case, 23 from that point, is to make sure we are aware of it, 24 we have record of it, and if action is required that 25 we take it. We do not generally take action on 0031 1 hazardous material spills because it is outside of our 2 expertise. 3 The issues we might take action on would be if 4 there was a collision, a derailment, a fatality, we 5 might send staff out to the location if we believe 6 that it is critical. We would also coordinate with 7 the FRA. A lot of times if we get a call of a serious 8 issue, say there's a derailment, I might contact the 9 FRA. We will coordinate our resources with them. 10 Generally, they are the lead agency in that point of 11 view there, but often we hear before them. I would 12 say probably in the last year FRA has also asked to be 13 added to this notification list now, so they get it 14 too. 15 Our job there is to coordinate and make sure 16 we respond as necessary, dependent upon the incident. 17 CHAIRMAN DANNER: Okay. So let's say 18 that 1,611 gallons leaked and we are notified within 19 30 minutes. What would be the action that you would 20 take if you knew that Ecology had been notified, or 21 perhaps you are notified and Ecology hasn't been, or 22 you're not told whether Ecology has -- 23 MR. PRATT: No, generally I do. That's 24 generally something they report to me. They will say, 25 Ecology has been notified, yes or no? 0032 1 If there is a spill like that and Ecology has 2 not been notified, my job would be to contact them 3 right away, or ask EOC to contact them right away. 4 They disperse the spill response. They would get 5 somebody out there to contain it and clean up. 6 CHAIRMAN DANNER: But you wouldn't -- 7 there's no urgency on your part to get a UTC inspector 8 up to that facility? 9 MR. PRATT: Not specifically on a spill. 10 Again, it would depend upon the seriousness of it. 11 CHAIRMAN DANNER: Okay. 12 MR. PRATT: I can think of some 13 scenarios maybe where we would want to send somebody 14 up, but primarily we would want to make sure that 15 somebody was there cleaning it up. 16 Most of these issues fall under FRA 17 jurisdiction. We would make sure that FRA had an 18 inspector on their way. Often, if they don't, we 19 would send one in their place. 20 CHAIRMAN DANNER: All right. 21 So in a number of cases -- and maybe this is 22 for Mr. Hellman -- the calls were not -- they were 23 made on the same day, but they were not made within 30 24 minutes. There's a number of instances of this. In 25 the Railroad's opinion, is there a time criticality to 0033 1 making a report within 30 minutes? 2 MR. HELLMAN: Certainly, Mr. Chairman, 3 we make every effort to comply with laws and 4 regulations where we are operating. Safety is the 5 number one priority of our railroad. 6 My understanding is that in this situation, 7 there was concern over conflicting Washington state 8 regulations. BNSF has made notifications using 9 Washington Department of Ecology spill notice 10 criteria, but through productive discussions with the 11 UTC regarding the reporting of potential releases, 12 they may not otherwise trigger a report to the EOC 13 under Ecology guidelines. BNSF has now expanded its 14 reporting in an effort to capture those isolated 15 incidents where a report to Ecology may not be 16 required. 17 CHAIRMAN DANNER: So Ecology wouldn't 18 require you to report a spill to them within 30 19 minutes, but the UTC might; is that what you 20 are saying? 21 MR. HELLMAN: What I am saying is I 22 think there was perhaps some confusion about 23 overlapping regulations and that protocols that were 24 in place to ensure that we were meeting regulations 25 through Ecology were somehow confused with what 0034 1 that responsibility -- how that responsibility 2 translates to the UTC. 3 CHAIRMAN DANNER: But in either case, 4 you would have been required to notify the EOC; is 5 that correct? 6 MR. HELLMAN: My understanding is that 7 we did notify the EOC on the possible spillage that we 8 felt would have been captured underneath the laws and 9 regulations of the State. 10 CHAIRMAN DANNER: Okay. But in a number 11 of these cases it wasn't within the 30-minute 12 deadline. 13 MR. HELLMAN: I think some of those 14 were -- were argued within the settlement agreement, 15 or discussed within the agreement, and that the 16 agreement reflects the best communication between our 17 organization, the UTC, the State of Washington, in 18 terms of how those actually came. I believe there was 19 some discussion and possibly some conflict over what 20 exactly was reported or reportable and when those 21 reports were made. 22 MR. DiJULIO: From the statement, 23 Commissioner Danner, it is clear that there was some 24 reporting that was not right within the 30 minutes. 25 Some of that is directly related to where the calls 0035 1 started. In some cases, as reflected by reporting, 2 the calls came directly from local people at BNSF 3 in -- on the ground, in the state of Washington. In 4 other cases, the calls went to a desk in Fort Worth, 5 that is charged by -- that is -- it's a 24/7 emergency 6 hotline, that the Railroad publishes, that the UTC and 7 EOC has, that is reporting -- any incident reported 8 immediately. Sometimes the calls come out of that 9 desk to the reporting agencies. 10 As Mr. Hellman indicated, one of the questions 11 that arose last fall, that has now been reconciled in 12 the course of these discussions, is that BNSF has 13 created an app for all of its personnel. It has all 14 of the reporting requirements in the 30-plus states 15 that have reporting separately from the National 16 Response Center, the NRC, to make sure that any spill 17 gets reported, whether it falls within some of the 18 jurisdictional limits that may differ, depending what 19 jurisdiction you're in, because it differs. 20 Some reporting is required by the NRC, that -- 21 or some reporting is required at the State of 22 Washington level, that is not required at the NRC. 23 That was one of the tensions. Ecology has generally 24 adopted the NRC standard. We have -- BNSF, for its 25 part, isn't paying attention to any distinctions, it 0036 1 is reporting everything. I will state that for -- 2 from an internal standpoint, the goal of the -- of 3 BNSF, both locally and at the national desk in Fort 4 Worth, is to report within 15 minutes, not half an 5 hour now. 6 CHAIRMAN DANNER: Okay. Well, I 7 appreciate that. 8 I understand that, you know, we are in a 9 federal system and you operate in many states, but I 10 also believe that -- that with planning and resources 11 that -- that you can satisfy all of the various 12 masters that you have. I am happy to hear about that 13 progress. 14 So I next want to turn to -- 15 COMMISSIONER RENDAHL: Chairman Danner, 16 may I ask a few questions -- 17 CHAIRMAN DANNER: Oh, sure. 18 COMMISSIONER RENDAHL: -- before you 19 turn to another -- 20 CHAIRMAN DANNER: Do you want to stay on 21 this topic for a while? 22 COMMISSIONER RENDAHL: Yes. 23 CHAIRMAN DANNER: All right. 24 COMMISSIONER RENDAHL: That makes sense. 25 CHAIRMAN DANNER: Go right ahead. 0037 1 COMMISSIONER RENDAHL: I just have a 2 few. 3 This is for both Staff and for Mr. Compton. 4 If you could both talk about this, whether you have 5 had conversations with the 24/7 call center staff, and 6 the call center staff, to talk about particularly 7 these railroad reporting incidents. It sounds like, 8 Mr. Compton, from what you have said, that you have 9 been reminding your staff about the importance of 10 this. Have the two agencies had conversations about 11 this? 12 MR. COMPTON: We have had regular 13 conversations, primarily my supervisor and myself, 14 with Dave Pratt and with Ms. Young, through e-mails 15 and telephone. 16 COMMISSIONER RENDAHL: And Ms. Young or 17 Mr. Pratt? 18 MR. PRATT: Yes, I would agree with 19 that. We have had multiple conversations since this 20 case started, to make sure we understood procedures. 21 We talked about the problems that occurred and their 22 assurances that those were corrected. 23 COMMISSIONER RENDAHL: So are you 24 confident at this point, that you think any -- any 25 misunderstandings or lack of follow-through have been 0038 1 corrected? 2 MR. PRATT: I've been given the 3 assurances, yes. 4 COMMISSIONER RENDAHL: Okay. 5 And Mr. Compton? 6 MR. COMPTON: I think it can be 7 documented through the e-mails that we have been 8 sending to them, based on the reports that we have 9 received over the last few months. 10 COMMISSIONER RENDAHL: Okay. Thanks. 11 That's all I have on this particular question 12 about the EOC, so thank you. 13 CHAIRMAN DANNER: Mr. Jones, do you have 14 any questions at this time? 15 COMMISSIONER JONES: No. 16 CHAIRMAN DANNER: Okay. 17 So I wanted to ask the -- to get some 18 clarification on this issue of possession, if you 19 will. As I understand it, when there is a leak and it 20 is discovered on a shipper's property, even though 21 that leak may have happened for a thousand miles on 22 the track, and may be actually leaking on the track, 23 if it's not discovered until it is on the shipper's 24 property, then it is not a reportable incident. Is 25 that the understanding? 0039 1 I don't know if this is directed to counsel or 2 if this is directed at witnesses, but I will throw it 3 out there for whoever feels that they can help me 4 clarify that information. 5 MR. DiJULIO: As indicated in the 6 settlement, that's one of the disputed areas of 7 concern. It is the position of BNSF that when the 8 piece of equipment is no longer under control of the 9 railroad, then the railroad has no further 10 responsibility for it. In the case of the incident 11 that was cited regarding November 5th, not only was it 12 not on BNSF trackage, it was not on BNSF property, and 13 it was not under the control of the Railroad. As I 14 suspect, the Commission understands the Railroad 15 doesn't own most of the cars that are operating. 16 So our position, legal position, but certainly 17 not for purposes of settlement, is that when the leak 18 is discovered, it is the responsibility of the entity 19 that controls the facility, controls the track, 20 controls the train, that is responsible for reporting. 21 As it turns out, nevertheless, BNSF did report it to 22 the NRC in that case. 23 CHAIRMAN DANNER: So, you know -- and 24 this -- this is -- I struggle with this one because in 25 some ways this sounds like it could be, you know, a 0040 1 high-speed chase, where you are trying to get across 2 the state line, where you are absolved of 3 responsibility. In this case, you may have a leak 4 that occurs in Montana and Idaho and Washington, gets 5 to the shipper's property, crosses the line, and the 6 Railroad has no duty to either inspect its trains 7 along the way or a duty to notify the EOC, even though 8 it may know about the leak before the shipper does. 9 I guess if -- if that is the position of the 10 Railroad, it seems a rather -- a rather technical one, 11 as opposed to a policy-based one. I am just 12 wondering, is there any other responsibility that the 13 Railroad has when it is on the track before it gets 14 across the state line to the shipper's property? 15 MR. DiJULIO: Well, answering the 16 broader question, and unrelated to the specifics of 17 this incident, BNSF is very much concerned about that, 18 and I suspect the Commission is aware of the issue. 19 In fact, the -- one of the more clearer exposures in 20 this particular case relates to an incident that was 21 not reported, regarding what are known as McKenzie 22 valves, a piece of equipment that is not owned by the 23 Railroad, a piece of equipment on a car that has been 24 a cause of concern. That is the Railroad's concern, 25 that it is in fact resulting in spillage of product 0041 1 and is addressing that. 2 It is not the fact that, you know, it is 3 running across state lines. It does have the 4 responsibility under the national standards for 5 inspection of its trains, and does in fact inspect 6 those trains throughout the course of the transit from 7 point to point. And some of the investigation -- 8 CHAIRMAN DANNER: So where -- where does 9 that inspection take place? 10 MR. DiJULIO: It depends on where the 11 train is. Obviously, if the train is moving, there is 12 not going to be an opportunity for inspection. 13 CHAIRMAN DANNER: Sure. 14 MR. DiJULIO: But as I think indicated 15 by Ms. Young's investigation, and UTC's own 16 investigation, when they are in yard, when they are in 17 switching areas, then there is a presence of an 18 inspection. In fact, in the Pasco yard, which is one 19 of the large yards in the state, there were two 20 incidents that were reported by -- as a result of a 21 UTC inspection of the trains. 22 There is an opportunity, and the Railroad 23 will -- does inspect those cars, those trains, when it 24 is in a position to do so. Traditionally, typically, 25 in yards, beginning, middle, when it is in stoppage 0042 1 position, and at the end, typically. 2 CHAIRMAN DANNER: And so just as a 3 general matter, an oil train that is leaving 4 North Dakota, going west, it will stop in yards along 5 the way in almost every case. They don't just go as 6 an entire train all the way to Cherry Point, for 7 example? 8 MR. DiJULIO: There are two questions 9 there. The question is as an entire train. The 10 trains that typically leave North Dakota are unit 11 trains. They are trains of approximately 100 cars in 12 size, engines, plus buffer cars on either end, so 13 maybe 106, 108 cars total in length. Those unit 14 trains go from point -- from point of origination to 15 point of destination. The assemblage of the cars 16 occurs at the point of origination, in North Dakota. 17 CHAIRMAN DANNER: And it doesn't change 18 until -- 19 MR. DIJULIO: And it doesn't typically 20 change until it gets to the refinery, point of 21 delivery, shipper, wherever it's going. 22 But those unit trains are going to stop at 23 some point along the way for switching, as they move 24 from one track to another track, in order to get to 25 where they are located. That's when the Railroad does 0043 1 inspect trains. 2 CHAIRMAN DANNER: Is that inspection 3 something that happens regularly? Is that part of 4 their operating procedures, or it just doesn't -- 5 happen happenstance, if there's an -- 6 MR. DIJULIO: It's part -- 7 CHAIRMAN DANNER: -- inspector in the 8 yard? 9 MR. DiJULIO: It's part of the operating 10 procedures. 11 CHAIRMAN DANNER: Okay. 12 COMMISSIONER RENDAHL: Mr. DiJulio, I 13 would assume, too, that there are hours of operation 14 requirements for the locomotive engineers, that they 15 have to stop to change engineers at some point between 16 South Dakota or North Dakota? 17 I may have to ask your experts here. 18 MR. DiJULIO: But I don't know whether 19 they change on the fly or whether the train physically 20 stops or not. 21 COMMISSIONER RENDAHL: Right. 22 MR. HELLMAN: The train would physically 23 stop and they would change out the crew. That happens 24 regularly between North Dakota and the final 25 destination, wherever that may be. 0044 1 COMMISSIONER RENDAHL: And when you 2 change out a crew, do you do any -- did they do any 3 inspection of the train, to make sure that the 4 locomotive engineer, who is taking possession of the 5 train and driving it, knows that the condition of the 6 train is a certain way? 7 MR. HELLMAN: Correct, there is a set of 8 operating procedures that they go through. There is 9 an actual whole manual that travels with the train 10 crew. There's a set of procedures that they go 11 through when they stop that train, when they secure 12 the train, when they pass that train over, with the 13 idea that they are going to be handing the next crew a 14 safe train. The next crew that's coming online will 15 also be ensuring that that train is safe. 16 COMMISSIONER RENDAHL: I am assuming 17 that with this valve issue that's been identified, 18 that there is a procedure now to make sure that the 19 valves are secure and not leaking? 20 MR. HELLMAN: In terms of the McKenzie 21 valve, Mr. DiJulio may be best to answer that question 22 because the McKenzie valve issue is an ongoing issue. 23 I can say that the issue of the McKenzie valves has 24 been highlighted within the railroad and that those 25 people who are working with those trains are aware of 0045 1 that and are particularly sensitive to the possible 2 challenges that those valves may create. 3 CHAIRMAN DANNER: Actually, I would like 4 to follow up on that. 5 So these are valves that we know have had 6 defects, that have led to some leakage, yet they are 7 still being -- they are still being used, the cars 8 that they are on are still being used; is that 9 correct? 10 MR. HELLMAN: Well, my understanding is 11 that the Railroad has raised those issues and they are 12 being discussed at a higher level, within the federal 13 bureaucracy, I imagine. 14 Part of the challenge that we have is that we 15 operate the trains. We don't always necessarily own 16 the cars that we are moving with and therefore have 17 limited authority over the rolling stock that might be 18 moving on our railroad. 19 CHAIRMAN DANNER: So even -- 20 MR. HELLMAN: There's a whole set of 21 issues that -- 22 CHAIRMAN DANNER: Even if a tank has 23 been identified as having a defective valve that is 24 prone to leakage, that you wouldn't be able to tell 25 the tank car company or the shipper that you want 0046 1 to -- you don't want to take that car at this time? 2 MR. HELLMAN: Well, not in all 3 circumstances. You know, you would have to go through 4 a process where the other side would provide their 5 evidence, and there would be a discussion as to 6 whether or not the issues that we raise are accurate 7 or whether or not the issues that they raise are 8 accurate. So even though we may not agree with a 9 piece of rolling stock or say something like a valve, 10 we don't always have control over that. The best 11 control we have is to ensure that people are aware of 12 those issues and are taking necessary steps to ensure 13 that that won't come back and create a safety issue 14 while it is under our authority. 15 CHAIRMAN DANNER: Are you aware of any 16 FRA or other federal government review of McKenzie 17 valves? 18 MR. HELLMAN: I am going to defer to 19 Ms. Wallace on that. 20 CHAIRMAN DANNER: Thank you. 21 Ms. Wallace? 22 MS. WALLACE: So the federal government 23 and the federal regulators are aware of the issue. 24 They -- 25 CHAIRMAN DANNER: And the federal what, 0047 1 I'm sorry? 2 MS. WALLACE: The federal regulators are 3 aware of the issue. 4 A notification has gone out to the shippers, 5 so the owners of the tank cars are required -- and I 6 can get you the exact timing, I'm happy to do that and 7 send that to you, about the exact timing of when the 8 valves need to be replaced. 9 I know several of the tank car owners here in 10 the state of Washington are actively working on, with 11 the tank car manufacturers, to get those replacements 12 in and to meet that deadline. I believe the deadline 13 is -- I will get you the exact time line and send that 14 to you. But there has been a notification and a 15 requirement sent out to all the owners of the tank 16 cars to get those valves replaced. 17 CHAIRMAN DANNER: Okay. I don't know 18 insofar as it is a federal document, can we take 19 notice of it if we obtain it or do you want to do a 20 bench request? 21 JUDGE KOPTA: Well, just for 22 clarification, let's make it a bench request. We will 23 make it Bench Request 4. 24 Mr. DiJulio, since you are a party, when do 25 you expect that you would be able to get us that? 0048 1 CHAIRMAN DANNER: And our staff may 2 already have it. 3 MR. DiJULIO: It is common information, 4 it's been widely publicized, it has been put out. We 5 should -- we will get it to the information center for 6 this record by the close of business on Wednesday the 7 21st. 8 JUDGE KOPTA: Okay. 9 CHAIRMAN DANNER: I did notice 10 Mr. Lewis's nod, in the back of the room, that he 11 actually has this document in his possession. If you 12 would rather just have him distribute it, we can do it 13 that way as well. 14 JUDGE KOPTA: Since this is on the 15 record, why don't we just go ahead and have you 16 provide it to us. It makes for a cleaner record if 17 the party provides it. 18 MR. DiJULIO: That's fine, happy to do 19 so. 20 COMMISSIONER RENDAHL: Mr. DiJulio, is 21 there a standing sort of fix? I am assuming that the 22 Railroad or the manufacturer or FRA has come up with 23 some kind of temporary fix so that we don't have 24 railroads running around with leaking valves operating 25 right now. Is there one in effect? 0049 1 MS. WALLACE: Yes. I actually just 2 pulled up the directive from the FRA. There is a fix. 3 They have outlined two. It's pretty technical, but 4 basically it is going to be replacing a certain type 5 of 3-inch ball valve with the correct 1- or 2-inch 6 valves. 7 COMMISSIONER RENDAHL: So before they 8 replace those valves, is there some way to ensure, 9 like putting in another, I don't know -- 10 MS. WALLACE: Another fix? 11 COMMISSIONER RENDAHL: -- washer, for 12 lack of a better term. 13 MS. WALLACE: Yes, I believe there is. 14 I am not an engineer or a technical expert on this, 15 but it is in the directive that I believe Staff has 16 and that we will send out as well. 17 COMMISSIONER RENDAHL: Okay. So right 18 now we don't -- there is no leaking valve at the -- 19 they are not leaking because there has been a 20 temporary fix, but the valve issue is being corrected? 21 MS. WALLACE: There is a directive right 22 now, and I know the tank car owners are working very 23 closely to address the issue. 24 CHAIRMAN DANNER: Are you aware -- 25 MR. DiJULIO: They don't all leak, but 0050 1 some -- but enough of them do leak that it is a 2 problem. 3 CHAIRMAN DANNER: Thank you for that 4 clarification. 5 COMMISSIONER RENDAHL: Thank you. 6 CHAIRMAN DANNER: Because of that, are 7 there any changes to the Railroad's operations, such 8 as more frequent inspections, or anything along those 9 lines? 10 MS. WALLACE: We are working very 11 closely with the owners of the tank cars to make sure 12 that they are in compliance with the directive, 13 providing any technical expertise that they may 14 request. We are in constant communication with them 15 on which tank cars may be affected. Again, not all 16 tank cars are impacted. We do know that most of our 17 customers and shippers are working very closely to 18 make sure that this issue does get resolved. 19 CHAIRMAN DANNER: Okay. But there's 20 no -- no change in the Railroad's operating procedures 21 with regard to inspections or something like that? 22 MS. WALLACE: No. 23 CHAIRMAN DANNER: Okay. 24 MS. WALLACE: Our inspections continue. 25 And the one thing I will add on -- 0051 1 CHAIRMAN DANNER: Do you mean continue 2 in the way they would if it were an oil train or if it 3 were any other commodity being shipped? 4 MS. WALLACE: Correct. And we do have 5 stricter operating procedures on unit trains, crude by 6 rail, and those have been going on in voluntary 7 measures over the last 18 months or so. 8 CHAIRMAN DANNER: Okay. Thank you. 9 If I may, so once the train moves onto the 10 refinery property or the shipper's property and a leak 11 is detected by -- let's -- I mean, in some cases it's 12 the FRA inspectors, but let's -- if it's -- if it's 13 determined -- if it's identified by an employee of the 14 refinery, what obligation does the refinery have to 15 call the EOC or the Department of Ecology? 16 MR. DiJULIO: Well, my response is that 17 they have the same responsibility for spill reporting 18 as any of us do in that regard. 19 CHAIRMAN DANNER: Okay. And so is 20 that -- have you received -- Mr. Compton, have you 21 received calls from shippers or refiners about rail -- 22 oil leaks on trains? 23 MR. COMPTON: Primarily, when it comes 24 to a train leak, they are calls from the rail owner, 25 whether it be Union Pacific, BNSF, whoever it is. 0052 1 CHAIRMAN DANNER: But to clarify, from 2 the railroad? 3 MR. COMPTON: Exactly. 4 CHAIRMAN DANNER: Not the tank car owner 5 or the refiner, but from -- 6 MR. COMPTON: That's true. 7 CHAIRMAN DANNER: Burlington Northern 8 or UP or another rail line? 9 MR. COMPTON: However, we do receive 10 calls from refineries and others about spills that are 11 on the scene. I cannot tell you -- there's so many. 12 There's I think in the neighborhood of 3,000 a year, 13 somewhat more than that, that are received from all of 14 the people throughout the state to the alert warning 15 center. I can't give you a specific case of whether 16 or not it was a railcar or if it was just being 17 reported as -- 18 CHAIRMAN DANNER: Yeah, so -- so you 19 don't -- do you know whether they are required to 20 notify you? 21 MR. COMPTON: I do not. We receive the 22 calls based on -- the Ecology folks are the ones that 23 are the actual legal authority in our review. We just 24 receive the calls and pass the information on. 25 CHAIRMAN DANNER: Mr. Beattie or 0053 1 Mr. DiJulio, do you have information in regard to the 2 obligation of the shippers? 3 MR. BEATTIE: Chairman Danner, I am not 4 aware of any other -- you know, any obligations on 5 shippers or refiners, I haven't done that research. 6 The WAC that is at issue in this case only applies to 7 railroad companies. 8 CHAIRMAN DANNER: Okay. All right. 9 JUDGE KOPTA: Moving on? I have a 10 couple of questions. 11 CHAIRMAN DANNER: Yes, go ahead. 12 JUDGE KOPTA: Mr. DiJulio, does the 13 railroad have a contractual arrangement with each of 14 its shippers? 15 MR. DiJULIO: Yes. 16 JUDGE KOPTA: And as part of the terms 17 and conditions, is there anything in there about 18 reporting, in terms of spills on the property? Does 19 the shipper have any obligation to inform the Railroad 20 if there is a spill from one of the cars that's been 21 delivered to its property? 22 MR. DiJULIO: I don't know the answer to 23 that question. 24 JUDGE KOPTA: In this one incident that 25 is listed in the response to the bench request and is 0054 1 part of the settlement agreement, the Railroad did in 2 fact report this spill, even though it was on the 3 shipper's property. Is that something that's part 4 of -- maybe Mr. Hellman would know. Is that something 5 that is part of the Railroad's standard procedure, if 6 it learns of a spill, even if it's not responsible, it 7 would go ahead and report it? 8 MR. HELLMAN: Could you repeat the 9 question, please? 10 JUDGE KOPTA: Sure. In the first 11 incident, the November 5th incident at the Blaine BP 12 Cherry Point facility, that was on the shipper's 13 property. The Railroad did in fact report that. Not 14 to the EOC, I gather, but to perhaps the -- 15 MR. DiJULIO: NRC. 16 JUDGE KOPTA: -- NRC. Is that something 17 that's part of the Railroad's normal procedure if it 18 learns of a spill, even though it is not perhaps 19 technically legally responsible for it, that it will 20 report that? 21 MR. HELLMAN: Yeah, I can't speak to the 22 specifics of that. 23 JUDGE KOPTA: Does the Railroad have any 24 kind of a procedure or process to report spills that 25 it learns of, even if it may not be ones that it 0055 1 believes it has a legal obligation to report? 2 MR. HELLMAN: I don't know of one. I 3 imagine it would be on a case-by-case basis. In this 4 specific instance -- I don't know the specifics of 5 this instance, so I really can't speak to it. 6 MR. DiJULIO: I know that as a result of 7 the recent emphasis on reporting, that the Fort Worth 8 desk reports without evaluation, it just reports and 9 worries about responsibility later. 10 JUDGE KOPTA: So is it common for 11 shippers to inform the Railroad when it discovers a 12 spill on a tank car that's been delivered? 13 MR. DiJULIO: We hope so. 14 JUDGE KOPTA: Anything more than hope? 15 MR. DiJULIO: I can't answer the 16 question as to whether or not they are contractually 17 obligated to do so. 18 JUDGE KOPTA: But at least in this one 19 instance they did in fact report it? 20 MR. DiJULIO: Well, again, we believe 21 that we received a report from them and reported 22 accordingly, but we also could have been on site for 23 some other reason and determined that there was a leak 24 and reported it. 25 JUDGE KOPTA: So at this point you don't 0056 1 know whether there is any kind of process in place for 2 the Railroad to be informed by a shipper if there has 3 been a spill on the shipper's property as a result of 4 a tank car that's been delivered by the Railroad to 5 the shipper? 6 MR. DiJULIO: We cannot answer that 7 question today. 8 JUDGE KOPTA: All right. Thank you. 9 COMMISSIONER JONES: Judge, I have a 10 follow-up question on that. 11 JUDGE KOPTA: Sure. 12 COMMISSIONER JONES: So on this BP 13 Cherry Point facility on November 5th, 2014, it is my 14 understanding in this bench request that BNSF did 15 report it to the NRC, correct? 16 MR. DiJULIO: Correct. 17 COMMISSIONER JONES: Now, is that under 18 the control of the EPA, the Coast Guard? I'm a 19 little -- do you know where that resides in the 20 federal government, Mr. DiJulio? 21 MR. DiJULIO: That's the Department of 22 Transportation. 23 COMMISSIONER JONES: It's DOT? 24 MR. DIJULIO: Yes. 25 COMMISSIONER JONES: But there was no 0057 1 report to the EOC by BNSF? 2 MR. DiJULIO: Not in that case, correct. 3 COMMISSIONER JONES: Mr. Compton, so did 4 Savage report that? Did the shipper report that to 5 the EOC? 6 MR. COMPTON: I do not have any report 7 at all on that particular day. I did print the log 8 for November the 5th. I don't have anything in regard 9 to this incident. 10 COMMISSIONER JONES: Okay. 11 CHAIRMAN DANNER: Again, Mr. Compton, 12 just to clarify, when something is reported to the 13 NRC, eventually -- or what is the process for them to 14 get that information to you, or do you have to go find 15 it from NRC? 16 MR. COMPTON: It's an interesting 17 question. They push the information, we don't -- we 18 don't pull it. 19 CHAIRMAN DANNER: Okay. 20 MR. COMPTON: The NRC that I'm speaking 21 of, the National Response Center, it's my 22 understanding it is governed by the U.S. Coast Guard. 23 There may be two -- two governmental agencies here 24 that we are talking about, that have a very similar 25 acronym, I'm just not sure. 0058 1 MR. DiJULIO: It -- 2 COMMISSIONER JONES: Yeah, that's why -- 3 MR. DIJULIO: It is the Coast Guard, I 4 apologize. I just -- frankly, I was thinking about 5 all of this under DOT. It is the Coast Guard. 6 CHAIRMAN DANNER: The Coast Guard used 7 to be under the DOT. 8 MR. DiJULIO: It used to be a long time 9 ago. 10 MR. COMPTON: So the only thing I can 11 think of -- and I'm just talking off the cuff here, I 12 have no specific knowledge of this particular incident 13 because it did not come to us -- is since it was so 14 close to the border, it may have been, by the NRC, 15 construed as a north of the border-type station, as 16 opposed to an actual state of Washington situation. 17 Again, I am just talking right off the cuff here. 18 CHAIRMAN DANNER: So if something 19 happens in the far north of the United States, the NRC 20 will have confusion -- 21 MR. COMPTON: I don't -- 22 CHAIRMAN DANNER: -- about where the 23 boundary is? 24 MR. COMPTON: -- know. I cannot answer 25 that. I am just saying that's the only conceivable 0059 1 scenario in my head that would say that they did 2 not -- as a reason why they would not forward it to 3 us. 4 CHAIRMAN DANNER: Okay. 5 MR. COMPTON: We get -- 6 CHAIRMAN DANNER: In most cases they 7 will send you information when things get reported? 8 MR. COMPTON: Exactly. Along with other 9 partners, including the U.S. Coast Guard and others. 10 COMMISSIONER JONES: So I have a few 11 questions, if I could, for Mr. Hellman and BNSF. 12 I'm a little confused about the improved 13 enhanced reporting requirements that you briefly 14 mentioned. So you are saying that all of your 15 employees now have an app? Or Mr. DiJulio said that. 16 MR. HELLMAN: Mr. DiJulio said that. 17 COMMISSIONER JONES: So who has the app 18 and who do they report to on that app? Does it go to 19 NRC, the state EOC, somebody else? Just kind of 20 clarify that for me, please. 21 MR. DiJULIO: Because, as Commissioner 22 Danner inquired about the fact the trains cross state 23 lines, the Railroad wanted to be sure that its people 24 were reporting properly when it gets information 25 regarding a spill. What it did was created an app 0060 1 that has the reporting responsibilities for each of 2 the states that the Railroad operates in, as well as 3 the federal reporting responsibilities. So that if 4 there is a call from North Dakota to the service 5 interruption desk in Fort Worth, those people have the 6 phone numbers and the reporting responsibilities there 7 so they don't have to go look for it or figure out who 8 to report to. It's all right there. 9 COMMISSIONER JONES: Okay. 10 MR. DiJULIO: So that's what that app is 11 there to do, is to make sure that the folks on the 12 ground know whom to call, where. And also the desk in 13 Fort Worth knows that if -- for example, somebody on 14 the ground in the Pasco yard didn't make the call, the 15 person in Fort Worth knows to whom to make the call. 16 So those are the -- 17 COMMISSIONER JONES: Okay. 18 MR. DiJULIO: That's the purpose of that 19 app, to inform the people to make sure the reporting 20 gets done timely. 21 COMMISSIONER JONES: I used to be in 22 operations in my previous life. I am a big believer 23 in single point of contact. 24 Does that mean that the employee with the app 25 has the ability to communicate directly with EOC state 0061 1 of Washington, EOC state of Oregon, or does everything 2 have to go to the 7-by-24 active desk in Fort Worth? 3 MR. DiJULIO: It depends upon the -- 4 well, first of all, everything has to be reported 5 under BNSF's policies to the service interruption desk 6 in Fort Worth. That desk, 24/7, is also responsible 7 for reporting. Some of the reports are -- indicate 8 here that some of the calls came from the operational 9 people on the ground in the state of Washington, 10 particularly Justin Piper, who is the -- who is not 11 only stationed in the state of Washington, but is also 12 the western assistant director for hazardous material. 13 Because of his particular sensitivity to the EOC, he 14 will personally call the EOC, in addition to placing 15 his call to Fort Worth. And so because of the 16 heightened sensitivity to this, EOC may be getting 17 calls from two BNSF sources with respect to the same 18 spill. 19 COMMISSIONER JONES: Is that your 20 understanding, too, Mr. Hellman, that BNSF, since a 21 number of these incidents, is reporting almost any -- 22 I mean, the WAC 480-60-2310, in Sub A says "Release of 23 any hazardous material." So what is -- are you 24 reporting almost any hazardous material per the 25 guidance that Mr. DiJulio just mentioned? 0062 1 MR. HELLMAN: That's correct, 2 Commissioner. We have taken a more conservative 3 approach. 4 COMMISSIONER JONES: Okay. 5 And then just briefly, if you would, before we 6 move on to the next area of questions, describe how -- 7 just so I have an understanding, you talked about the 8 various jurisdictions. You are responsible for B.C., 9 Oregon? 10 MR. HELLMAN: Correct. 11 COMMISSIONER JONES: So how do B.C. and 12 Oregon differ and are similar to reporting 13 requirements, that 30 minutes, in any hazardous 14 material? How -- are they roughly similar to the 15 state of Washington or not? 16 MR. HELLMAN: Well, I think given the 17 level of conservatism that we just described in 18 approaching this, we are reflecting that in the areas 19 that we serve, including B.C., and Oregon as well. 20 Because we travel across 28 states throughout the 21 West, we try to have kind of standard operating 22 procedures as much as possible. The additional 23 securities that we are seeking in Washington, we will 24 likely be using those as well. 25 I would also mention that Mr. Piper also 0063 1 covers the state of Oregon as well, so there is going 2 to be consistency on an individual level, based on the 3 information that Mr. DiJulio just communicated. 4 COMMISSIONER JONES: Thank you. 5 COMMISSIONER RENDAHL: So you have 6 adopted a 15-minute notification period, at least in 7 Oregon, Washington, or all of your 28-state area? 8 MR. HELLMAN: We are communicating as 9 quickly as we can. 10 COMMISSIONER RENDAHL: Okay. Thanks. 11 CHAIRMAN DANNER: So I want to ask next 12 about the question -- there was a spill on 13 January 25th, and it's the thirteenth item listed in 14 Bench Request No. 1, and it talks about, What is a 15 reportable incident? It says a Reportable incident 16 is -- this was not one because it did not occur during 17 the course of transportation in commerce. In this 18 case, the lube oil leaked from the locomotive and was 19 not being transported in commerce. 20 Can you explain that distinction to me? 21 MR. DiJULIO: Yes, the simplest way to 22 explain it is that while there is a reporting 23 requirement for -- and the comment was made with 24 respect to UTC's jurisdiction. We all have 25 responsibilities with respect to reporting of 0064 1 hazardous waste spills, whether it is the UTC's 2 jurisdiction or subject to the state hazardous waste 3 laws. The fact is, that if -- we are supposed to 4 report an oil spill out of our car, it happens all the 5 time. It is not a commodity in transit that is 6 therefore subject to the Commission's jurisdiction and 7 therefore not reportable, consistent with the 8 Commission's regulation. 9 That's the answer to that question. It's 10 not -- internal lubrication material, whether it's in 11 my engine or in the WUT -- or a BNSF locomotive, is 12 not an item in commerce, not reportable as such. 13 Whether it had a responsibility to report it to 14 Ecology is a different issue, but it did not have a 15 responsibility to report it to the UTC. 16 CHAIRMAN DANNER: Basically, because 17 there's a -- you are defining -- let me go back. 18 MR. DiJULIO: It's a locomotive. It's 19 not an item in commerce, it's not being transported, 20 it is internal to the engine. If it is in a tank car, 21 it is reportable. 22 CHAIRMAN DANNER: So help me with this 23 because I am reading 49 CFR 171.15. That is the CFR 24 that has been adopted by reference by the UTC, as 25 required to do. It says, Reportable incident. A 0065 1 telephone report is required whenever any of the 2 following occurs during the course of transportation 3 in commerce. 4 So it says when something occurs during the 5 course of transportation in commence. I am trying to 6 figure out how that would be limited to the commodity, 7 as opposed to anything else that is a facet of making 8 mass transportation in commerce possible. I mean, 9 certainly in terms of the underlying policy, it would 10 seem to me that the environmental impacts of a spill 11 that involves fuel oil, as opposed to commodity oil, 12 wouldn't be that different, and so it wouldn't make 13 sense to have a rule that makes that kind of a 14 distinction when the environmental impact would be the 15 same. 16 But I also read this as saying when it occurs 17 during the course of transportation in commerce, that 18 that certainly would be more inclusive than just the 19 commodity itself. 20 I'm wondering if you have any -- is there case 21 law on this? Is there something I am not seeing here? 22 MR. DiJULIO: The Railroad relies on 23 precedent from -- with respect to federal 24 interpretation of that standard from throughout the 25 country in that respect. I don't have the citation, 0066 1 the authority, but it is a well recognized 2 distinction. 3 CHAIRMAN DANNER: And so -- 4 MR. DiJULIO: The Commission regulates 5 solid waste transport, but you don't regulate the 6 lunch -- the garbage in the -- of the driver on his 7 UTC rounds. He may violate law by throwing his bag of 8 litter on the road, but it's not violation of the UTC 9 regulations. 10 CHAIRMAN DANNER: And so somebody 11 somewhere is responsible for reporting that fuel oil, 12 which is not commodity oil, has fallen onto the ground 13 and is creating an environmental hazard, but we 14 don't -- it's not our agency, so somebody -- and 15 it's -- this is in the CFR, so it appears that it is 16 not DOT's responsibility. Whose responsibility is it 17 to notify somebody that fuel oil has fallen onto the 18 earth? 19 MR. DiJULIO: I can't answer that 20 question. 21 CHAIRMAN DANNER: Are you aware that 22 somebody is responsible for that? 23 MR. DiJULIO: If it is a hazardous 24 substance and is reportable otherwise pursuant to EPA 25 or Ecology or other regulatory standards, then it 0067 1 would be reportable. In this case, I don't know 2 whether 100 gallons of lube oil would meet the 3 requirements for reporting under RICRA or the state 4 act or otherwise. 5 CHAIRMAN DANNER: So since I am not 6 aware of the well-developed case law on this, I was 7 wondering if I could get some case law from you so 8 that I could -- or from counsel, or Staff, so that I 9 can get some -- some -- get my own mind around the 10 fact that when something occurs during the course of 11 transportation in commerce, it is only the commodity 12 itself. 13 JUDGE KOPTA: Mr. Hellman, it looks like 14 he is wanting to respond, Mr. DiJulio, but I will let 15 you nod in his direction first. 16 MR. DiJULIO: Well, I was looking to see 17 if I actually have that here today. I am looking at 18 my notes and I don't -- I am not locating it. 19 Mr. Hellman. 20 MR. HELLMAN: Mr. Chairman, a point of 21 clarification. You are referring to reporting of an 22 incident that occurred January 25th, 2015; is that 23 correct? 24 CHAIRMAN DANNER: I'm looking at that 25 one, but I am also looking at the CFR generally. I 0068 1 mean they are both referring to part 71 15 7b of 49 2 CFR. 3 MR. HELLMAN: So as a point of 4 clarification, the question is not whether BNSF 5 actually reported that incident, but it's a more broad 6 interpretation of the CFR; is that correct? 7 CHAIRMAN DANNER: Yeah, I'm trying -- 8 I'm trying to understand how there is a reading here 9 that when something -- we have a leak of fuel oil from 10 a train that is operating in transportation in 11 commerce, that that definition of transportation in 12 commerce is very narrow and wouldn't include fuel oil 13 that falls to the earth and creates an environmental 14 hazard, but would only deal with commodity oil that 15 falls to the earth and creates an environmental 16 hazard. 17 MR. HELLMAN: Okay. Thank you, 18 Mr. Chairman, for that clarification. 19 CHAIRMAN DANNER: Okay. 20 COMMISSIONER RENDAHL: So I have a 21 follow-up question. So it appears from Bench 22 Request 1 that there are four -- four incidents that 23 are potentially subject to whether they are a 24 reportable incident or not. Two that parties appear 25 to have stipulated that or not, and that would be 0069 1 No. 10, which was the December 13, 2014, and that was 2 lube oil in Quincy-Columbia subdivision, and the one 3 we were just talking about, the January 25, 2015 4 Seattle BNSF Interbay yard. Those are the two that 5 the parties agree. I guess I am looking to Staff and 6 counsel and Mr. DiJulio that -- agree that subject to 7 this reportable distinction we are talking about, in 8 terms of being in the course of transportation in 9 commerce, have stipulated that these are not subject 10 to being reported. 11 MR. BEATTIE: It is my understanding -- 12 and I will confer with Mr. DiJulio after the hearing 13 to provide additional legal backup for this. It is my 14 understanding that based on some of the comments he 15 made during the settlement negotiations, that Staff 16 was satisfied that this particular substance and the 17 way it was spilled did not meet the definition of 18 release of a hazardous material, out of the WAC, and 19 that's why we were satisfied that it was inappropriate 20 for the Commission to penalize the Company for that 21 particular release. 22 COMMISSIONER RENDAHL: Mr. DiJulio, is 23 that your understanding as well? 24 MR. DiJULIO: That is correct, 25 Commissioner. And -- but with respect to the general 0070 1 sensitivity to this issue, you have also understood 2 from the record in this case, that nevertheless it was 3 reported. 4 COMMISSIONER RENDAHL: It was reported 5 to the FRA under 5800. 6 MR. DiJULIO: Correct. 7 COMMISSIONER RENDAHL: Okay. 8 And then there are two other incidents that it 9 appears the parties couldn't reach agreement about, 10 and that would be the first one on November 5th at the 11 BP Cherry Point facility, and the second one being 12 the -- number two, in the Pasco grain yard, and 13 that -- I understand the nature of that is whether in 14 fact -- or I understand from just reviewing the 15 documents and trying to figure this out, that it 16 appears that it has to do with possession. 17 Is that a correct understanding of what the 18 dispute might be about? 19 MR. DiJULIO: That's correct. 20 MR. BEATTIE: Commissioner Rendahl, the 21 dispute regarding the first incident is whether -- you 22 know, can be characterized as whether the -- you know, 23 in whose custody was the car at the time of the leak, 24 and also whether BNSF knew, because the rule language 25 speaks of learning of an incident. So the dispute is 0071 1 whether BNSF -- anybody at BNSF knew that a leak 2 occurred in transit, which would -- you know, from 3 Staff's litigation position was that that would have 4 triggered the requirement. 5 We are not -- 6 CHAIRMAN DANNER: So -- 7 MR. BEATTIE: -- able to reach agreement 8 on that. 9 CHAIRMAN DANNER: The language you just 10 used, though, you said if the leak occurred while 11 in -- I can't remember exactly what you said -- in 12 the -- 13 MR. BEATTIE: In transit. 14 I want to be -- 15 CHAIRMAN DANNER: Before that you said, 16 though, that the leak -- the leak occurred while the 17 train was in the railroad's possession. So there's a 18 difference between the leak -- where the leak occurred 19 and where it was discovered. Are you -- is -- are you 20 talking about where the leak happened or are you 21 talking about where the leak was discovered? 22 MR. BEATTIE: Well, let me preface my 23 answer to that question by saying I want to be 24 careful, because the purpose of our being here today 25 is not to actually litigate this case. We are in 0072 1 agreement that we are joining forces to support this 2 settlement. 3 Were we to go to hearing, Staff's position, 4 which is known to the Company, would be that an FRA 5 inspector informed a BNSF representative that a leak 6 had occurred, and specifically informed that 7 representative that the leak occurred in transit. 8 Staff's position is that such information would be 9 sufficient to that BNSF representative to trigger, 10 hey, I've got to call this in. 11 Of course, you know, this isn't an evidentiary 12 hearing, so I don't want to get too much into these 13 disputed facts. The fact of the matter is, BNSF's 14 position, which Steve DiJulio has already articulated, 15 is that the leak was discovered when the car was not 16 in BNSF's custody, and further, that there was no 17 clear evidence that it occurred in transit, thus not 18 triggering any requirement. 19 That's sort of the crux of the dispute. For 20 purposes of settlement, we agree to disagree on that 21 and move forward with the penalty that we thought 22 reflected -- 23 COMMISSIONER RENDAHL: So I appreciate 24 the nature of the hearing that we are having. I am 25 just trying to get a sense of why the parties would 0073 1 believe something was reportable or not or why they 2 couldn't agree, and not wanting to delve into the 3 discussions occurring in settlement negotiations. 4 That's why I was asking whether this had to do more 5 with nature of possession and maybe timing of 6 discovery. Those first two appear to be in that 7 nature, and the latter to appear to be the question of 8 whether it is in fact subject to the rule. 9 MR. BEATTIE: We would agree on the 10 latter two. On the second one, just a quick point of 11 clarification. From my view, the crux of the ongoing 12 dispute about that, that has been settled by the 13 parties, is from BNSF's perspective the quantity was 14 small, one gallon we are talking about, and that there 15 was no evidence of contact with the ground. The 16 parties continue to dispute whether that still, 17 despite the quantity and the lack of hitting the 18 ground, would trigger the reporting requirement. 19 CHAIRMAN DANNER: So can I ask a 20 question? When something leaks from -- when a liquid 21 leaks from a train, where does it go if it doesn't hit 22 the ground? Does it disperse into the air? I'm just 23 curious whether that -- that was a curious comment. 24 MR. BEATTIE: Well, given -- you know, 25 again with the same caveat I had before, it would be 0074 1 staff's position at an evidentiary hearing that -- 2 CHAIRMAN DANNER: Okay. 3 MR. BEATTIE: -- requirement to hit the 4 ground is not actually in the rule. 5 MR. DiJULIO: It could very well sit on 6 the side of the car and just get gummy. 7 COMMISSIONER RENDAHL: Thank you for -- 8 CHAIRMAN DANNER: So -- 9 COMMISSIONER RENDAHL: -- allowing me to 10 ask these specific questions. 11 CHAIRMAN DANNER: So there is no -- is 12 there some kind of legal presumption that it hits the 13 ground, or is there a legal presumption that it gums 14 up on the side of the car, or does that require an 15 evidentiary hearing in all cases? 16 MR. DiJULIO: It's the position of the 17 Railroad, Commissioner Danner, that that would be an 18 evidentiary hearing issue. 19 CHAIRMAN DANNER: Okay. 20 And then I just want some clarification, 21 because again, Mr. Beattie, what you said was, with 22 regard to January 25, 2015 leak of 100 gallons of lube 23 oil, you said that didn't rise to a hazardous 24 materials incident. Was that the -- was that the 25 reason or the basis for this one being contested, or 0075 1 because in the narrative that you provide here in 2 Bench Request No. 1 you talk about it as not having 3 occurred during the course of transportation in 4 commerce? I'm just wondering, what is the basis for 5 your position on that? 6 MR. BEATTIE: My understanding is -- 7 CHAIRMAN DANNER: Is it because it is 8 not in commerce -- 9 MR. BEATTIE: -- lube oil -- 10 CHAIRMAN DANNER: -- or is it because 11 it's not -- 12 MR. BEATTIE: -- could not be defined as 13 a hazardous material within the meaning of the WAC. 14 That's why Staff let go of those particular incidents 15 for purposes of settlement. 16 CHAIRMAN DANNER: Okay. So it's not -- 17 it's not because it is not in commerce, it is because 18 lube oil may not be a hazardous material. 19 MR. BEATTIE: Within the meaning of the 20 WAC, correct. 21 COMMISSIONER JONES: Is that your 22 understanding too, Mr. Pratt? 23 MR. PRATT: Yes, it is. 24 CHAIRMAN DANNER: So may I ask, what are 25 the characteristics of lube oil that make it more or 0076 1 less hazardous than crude oil? 2 MR. HELLMAN: Is the question directed 3 to me, Mr. Chairman? 4 CHAIRMAN DANNER: It is thrown out there 5 for whoever. 6 MR. HELLMAN: You were looking at me. 7 I can't speak to the specific qualities of it. 8 MR. PRATT: Mr. Danner, I can answer 9 that question. 10 CHAIRMAN DANNER: All right. Thank you. 11 MR. PRATT: I don't know the 12 characteristics, but I can tell you that the FRA 13 produces a table of hazardous materials and it is -- 14 there is a whole list, it is hundreds of pages of 15 tables. Lube oil is not on that table, so it is not 16 defined by the FRA as a hazardous material. 17 CHAIRMAN DANNER: Is lube oil -- is 18 there any distinction that lube oil is different than 19 any of the other materials on there? In fact, are you 20 giving a label to something where it is really just 21 oil? 22 MR. PRATT: There is no distinction in 23 their rules that I am aware of. 24 CHAIRMAN DANNER: So it could be that we 25 are calling this lube oil, when in reality it is oil 0077 1 for purposes of federal rules? I mean, I am just 2 asking that question. 3 Mr. DiJulio? 4 MR. DiJULIO: This is a nonengineer 5 person speaking. 6 CHAIRMAN DANNER: To another 7 nonengineer. 8 MR. DiJULIO: Lube oil is not explosive, 9 it's not flammable. And so there is a distinction 10 among the qualities or the characteristics of lube oil 11 that distinguishes it from other types of oil. I know 12 that from my understanding, but that's all I know. 13 CHAIRMAN DANNER: Okay. Well -- and 14 that's helpful, although, again, my nonengineer, 15 nonscientific head would assume that it doesn't help 16 the plants grow if it fell to the earth. I am just 17 trying to figure out the gradations and why things are 18 treated differently in law and rule. 19 Other questions? 20 COMMISSIONER JONES: On that point, 21 Mr. Chairman, I just refer us to the definition of 22 hazardous material in our rule. It just says, 23 Materials that are corrosive, flammable, explosive, 24 reactive with other materials, or toxic. 25 So if that is indeed the case, that's my 0078 1 understanding of lube oil, being a nonengineer, but 2 having been to some hazardous material testing sites 3 before. 4 A question for Mr. Hellman. This is just 5 putting this in perspective a little bit. So this 6 like a math quiz on unit oil trains. 7 The largest incident here that we are talking 8 about is, number one, at BP Cherry Point, in terms of 9 crude oil, right? And I want to speak in barrels. 10 So in one barrel, how many gallons? How many 11 gallons in a barrel? 12 MR. HELLMAN: Roughly 50 gallons, to my 13 understanding. 14 COMMISSIONER JONES: Would you accept 15 42? 16 MR. HELLMAN: I would accept that, 17 gladly. 18 COMMISSIONER JONES: So the biggest of 19 the 14 incidents here, the largest spill of petroleum 20 crude is Item No. 1, at Cherry Point, right? Roughly 21 about 38 barrels. 22 If you assume that there are 100 tank cars in 23 a unit oil train, how many -- how many barrels of oil? 24 MR. HELLMAN: Commissioner, I don't do 25 math publicly, I'm sorry. 0079 1 COMMISSIONER JONES: Would you hazard a 2 guess -- sorry, "hazard." Would you venture a guess 3 on how many barrels of crude oil are in a tank car? 4 MR. HELLMAN: In a tank car? 5 COMMISSIONER JONES: Yes. 6 MR. HELLMAN: How many barrels of crude 7 are in a tank car? 8 COMMISSIONER JONES: Barrels of crude 9 petroleum. 10 MR. HELLMAN: In terms of gallons, I 11 would venture 25- to 30,000, and then convert that to 12 barrels. 13 COMMISSIONER JONES: Okay. Subject to 14 check, would you accept about 700 barrels of crude oil 15 in a tank car? 16 MR. HELLMAN: Yes, that sounds about 17 right. 18 COMMISSIONER JONES: And about 60- to 19 70,000 barrels on a 100-unit oil train? 20 MR. HELLMAN: Generally, yes. 21 COMMISSIONER JONES: Those are fairly 22 significant quantities of crude oil, right? 23 MR. HELLMAN: Certainly. 24 COMMISSIONER JONES: Okay. 25 So the largest spill that we are dealing with 0080 1 is 38 barrels, which would be about, if math serves, 2 maybe 4 percent. And I am not saying that's 3 insignificant, I'm just trying to put this in 4 perspective. Four percent of one unit car, right? 5 MR. HELLMAN: Okay. 6 COMMISSIONER JONES: But what you 7 replied to me before is that you are reporting to the 8 EOC, in this reporting protocol that you have through 9 the NRC, is you are -- you are being very 10 conservative, not just for crude oil but for anything 11 related to petroleum products, and you are reporting 12 any, even if it's a gallon or one-tenth of a barrel. 13 You are trying to report as much as possible. 14 MR. HELLMAN: Well, Commissioner, I 15 don't know that I can give you a specific amount or 16 level or threshold that we are reporting or not 17 reporting. What I can say is that we are certainly 18 approaching it -- taking a conservative approach. We 19 are trying to be more aggressive on the reporting than 20 perhaps we have been in the past. 21 COMMISSIONER JONES: Okay. 22 That's all I have on that one, before we get 23 to further questions. 24 COMMISSIONER RENDAHL: So I have some 25 questions, and I think counsel will be very happy to 0081 1 hear it has something to do with the settlement 2 agreement. 3 So the -- and this is to both Staff and BNSF, 4 but I think I would like to hear first from Staff. 5 So is this -- would you say that the 6 substantial reduction and violations subject to 7 penalty that you all agreed to in the settlement is 8 due to the updated information from the EOC? 9 MR. BEATTIE: Yes, Commissioner Rendahl. 10 COMMISSIONER RENDAHL: Okay. 11 MR. BEATTIE: Also, the phone log that 12 was provided by BNSF through the course of informal 13 discovery, that indicated other calls had been made. 14 There are about four incidents that -- you know, 15 totaling about over 300,000 violations under state law 16 that were reevaluated by Staff simply based on those 17 phone logs. 18 COMMISSIONER RENDAHL: Okay. 19 MR. BEATTIE: So it wasn't just the EOC 20 updating its information, it was also through the 21 process of discovery. 22 COMMISSIONER RENDAHL: Thank you. 23 So -- and I don't know if Mr. Pratt or 24 Ms. Young, you can answer this. 25 If the Commission had received correct 0082 1 information from the EOC initially during its 2 investigation, would Staff have recommended a penalty 3 significantly less than the one that was recommended 4 in the investigation report? 5 MR. PRATT: Yes. By doing the math in 6 the report we have, we believe we ended up with 239 7 violations, so we would have pursued those instead of 8 700. 9 COMMISSIONER RENDAHL: And so would 10 Staff have still recommended a complaint and penalties 11 with the correct -- assuming you had the correct 12 information? 13 MR. PRATT: I believe so, yes. 14 COMMISSIONER RENDAHL: Okay. And -- 15 MR. PRATT: I guess I say the way that I 16 believe that is I would have to go back to that day 17 when we evaluated it. We do have two options in a 18 case like this, a penalty assessment or a complaint. 19 We would have evaluated those two options, so we would 20 have pursued one of them. 21 COMMISSIONER RENDAHL: And so -- but the 22 rationale for Staff pursuing the complaint is because 23 of the number of issues and the ongoing issue with the 24 leaks? 25 MR. PRATT: Yes. And the fact that we 0083 1 are limited to $100 per violation on the penalty 2 assessment, and we didn't believe that was the 3 appropriate amount. 4 COMMISSIONER RENDAHL: And so by filing 5 the complaint, did you think that Staff received the 6 response necessary from the Company, the Railroad 7 Company? 8 MR. PRATT: Yes, we have. And I will 9 say at this point that we believe that there has been 10 complete compliance since this time. We have been -- 11 we have been watching our records, we've been watching 12 the EOC reports and the NRC reports. We do believe 13 that they have made a substantial improvement. I will 14 say that I am getting calls now about one cup of 15 spills. 16 COMMISSIONER RENDAHL: That's good. 17 So I don't know, Mr. DiJulio, if you have 18 anything to add to what Staff responded to? 19 MR. DiJULIO: I will observe -- I cannot 20 obviously comment on what Staff was thinking or what 21 Staff's consideration or intent was, but from the 22 report itself, from March 2015, the report itself in a 23 number of places recognizes -- and I quote, recognizes 24 that BNSF generally complies with Commission 25 regulations. 0084 1 COMMISSIONER RENDAHL: But it showed 2 also -- 3 MR. DiJULIO: Stating again, BNSF staff 4 has been cooperative and responsive, and, quote, BNSF 5 has consistently demonstrated compliance. 6 As indicated by Mr. Hellman, and in the 7 materials before the Commission, there were issues 8 regarding to whom and in what quantities reports 9 should be made. The report itself, from March 2015, 10 would be characterized as perhaps expressing 11 frustration, that it was not -- Staff was not getting 12 the Railroad's attention sufficiently. That has been 13 addressed completely. As Mr. Hellman has indicated, 14 the Railroad is reporting, and also as Mr. Pratt has 15 indicated, the Railroad is reporting. 16 COMMISSIONER RENDAHL: Right, because 17 the investigation report indicates a number of 18 communications in which Staff attempted to provide 19 technical assistance to the Railroad, and continued 20 questions from the Railroad about what the requirement 21 was. 22 MR. DiJULIO: Yes. And again, without 23 speaking for or with respect to the intent of Staff, 24 had the Railroad been more responsive and demonstrated 25 its reporting compliance more readily, we may not be 0085 1 in the position we are in today, but nevertheless we 2 are and we want to move forward from here. 3 COMMISSIONER RENDAHL: Right. 4 So in terms of the settlement agreement, one 5 of the provisions in the settlement agreement has to 6 do with -- I think it's in Paragraph 6 of the 7 settlement agreement, about technical assistance. 8 That settlement provides that at a mutually convenient 9 time and date to be established by separate agreement 10 of parties, Staff will meet with Company 11 representatives to discuss, among other potential 12 topics, best practices for compliance with the rule. 13 Have the Company and Staff met since the 14 settlement agreement was filed to -- have you begun 15 these technical assistance meetings? 16 I guess that question is both for you, 17 Mr. DiJulio, and for Staff, or Mr. Hellman and the 18 Staff. 19 MR. DiJULIO: Those discussions -- on 20 behalf of the Railroad, those discussions commenced in 21 the course of the parties' both early settlement 22 discussions and in the informal discovery. Those -- 23 the discussions began. There has not been a formal 24 meeting between Railroad personnel and Staff, as 25 provided in Paragraph 6 of the settlement agreement. 0086 1 I will defer to the other parties to comment 2 on that as well. 3 COMMISSIONER RENDAHL: Mr. Pratt. 4 MR. PRATT: I would agree with 5 Mr. DiJulio's statement there about the -- during the 6 process we did have a lot of conversations about this. 7 We did not schedule anything formal. We believed it 8 was appropriate to wait until this settlement was 9 finalized and then have formal meetings. We are 10 planning on those, the Company is planning on those. 11 It would include staff down lower in the 12 organizations, to make sure we get down to where we 13 need to be. Mr. Piper, as they have mentioned his 14 name a few times, would be part of those. Ms. Hunter, 15 who is out of the state today, would also be part of 16 those. 17 COMMISSIONER RENDAHL: So in the event 18 you don't agree on what the best practices are, would 19 we hear back from the Staff and the Company? 20 MR. PRATT: Certainly. I am confident 21 that we would -- we will be able to agree on that. 22 COMMISSIONER RENDAHL: Okay. 23 And then one other question for both Staff and 24 the Company. So given that -- and this is about 25 Paragraph 5 of the settlement, on the monetary 0087 1 penalty. Given that there are still some areas of 2 potential disagreement, but given the -- the 3 importance of -- of this issue, the settlement 4 suspends over half of the penalty. What's the basis 5 for that? 6 MR. PRATT: Our belief -- our belief of 7 when we -- when we determined formulas for a suspended 8 penalty versus what is paid and what is suspended 9 over, is that we believe there should be a fair 10 penalty assessed at the time and that there should be 11 a substantial penalty left, so to speak, hanging over 12 the head of the Company, to help keep them in 13 compliance. We believe it is good incentive to have a 14 large suspended penalty hanging over them to create 15 compliance. 16 MR. DiJULIO: From the Railroad's 17 perspective on this issue, we looked to prior cases in 18 settlements, and we believe this settlement is 19 consistent with prior settlements that the Commission 20 has approved. From an advocacy standpoint, arguably 21 it is higher than potentially more serious complaints 22 that have been raised regarding issues subject to the 23 Commission jurisdiction, but again, that's a 24 negotiated issue between the parties. The Railroad is 25 prepared to accept this as a reasonable compromise 0088 1 regarding the claims and issues. 2 But in terms of what this -- where this came 3 from, it didn't come out of thin air, it came out of 4 looking at other settlements the Commission has 5 approved. 6 CHAIRMAN DANNER: I'm going to have 7 follow-up on that. 8 You are looking at other settlements involving 9 transportation companies, or are you looking at other 10 settlements involving household good movers? 11 MR. DiJULIO: Transportation companies. 12 CHAIRMAN DANNER: Transportation 13 companies. 14 So the penalty relative to the size of the 15 company or the size of the activity, you are looking 16 at all of that. These would be other penalties that 17 we have assessed against Burlington Northern or other 18 railroads in the state? 19 MR. DiJULIO: The other penalty that was 20 assessed against Burlington Northern was for a number 21 of crossing violations. 22 CHAIRMAN DANNER: I remember that. 23 MR. DiJULIO: You will remember that, 24 Commissioner Danner, from a prior case. 25 Without evaluating the degree of safety issues 0089 1 associated with that, the -- this settlement is 2 certainly within the same framework of that settlement 3 in terms of issues, amounts, and amount suspended. 4 CHAIRMAN DANNER: I recall that one 5 was -- I thought that was 105,000? 6 MR. BEATTIE: Chairman Danner, that's 7 Docket TR-121921. I have the Order 01 that I am 8 reading from. I believe that the Commission can take 9 official notice of this document. The maximum 10 authorized penalty was 457,500 in that case and the 11 Commission approved a penalty of 105,000, and 12 suspended approximately half of that. 13 CHAIRMAN DANNER: Okay. 14 MR. BEATTIE: And so, yes, Staff would 15 agree with Mr. DiJulio's remarks, that while not 16 obviously binding precedent, this case did inform the 17 settlement discussions. Actually, the total penalty 18 that the parties are advocating for in this case 19 represents a higher percentage of the maximum penalty 20 than was approved in the previous case. 21 CHAIRMAN DANNER: You are talking about 22 the full penalty, not -- not the penalty -- the 23 unsuspended part of the penalty? 24 MR. BEATTIE: That's correct. 25 CHAIRMAN DANNER: You're talking about 0090 1 the $71,000 as being about 10 percent of the -- 2 MR. BEATTIE: 10 percent, no. It is 3 actually about 30 percent of what the parties agree 4 would be in dispute were this case to go to an 5 evidentiary hearing. 6 CHAIRMAN DANNER: Okay. So you are 7 working off of 239, or whatever that was? 8 MR. BEATTIE: Correct. 9 CHAIRMAN DANNER: Okay. 10 MR. BEATTIE: And imagining that in that 11 case, were the Commission to find every violation 12 committed and impose the maximum penalty, the maximum 13 exposure for the Company would be 239,000. And so if 14 you -- 15 CHAIRMAN DANNER: Yeah. 16 MR. BEATTIE: -- you know, do the math 17 there. 18 CHAIRMAN DANNER: All right. Thank you. 19 That's helpful. 20 COMMISSIONER JONES: So I have a 21 question for Staff, and it is on the settlement 22 agreement, as Commissioner Rendahl said. It's on this 23 Paragraph 5, you know, the money. 24 The total penalty is 71,700, right, Mr. Pratt? 25 MR. PRATT: Correct. 0091 1 COMMISSIONER JONES: And you are going 2 to suspend -- so if we approve the settlement within 3 30 days, BNSF will pay $31,700 to the Commission, 4 right? 5 MR. PRATT: Correct. 6 COMMISSIONER JONES: Okay. So what 7 gives you comfort -- I think you spoke to this just 8 earlier. What gives you comfort that this is 9 sufficient to provide leverage? As you said, it is 10 something over their heads, over the head of the 11 Company. There is a little bit of leverage there. 12 But what gives you comfort that this will be, A, 13 honored, and B, that there is a sufficient culture of 14 compliance now at BNSF? 15 MR. PRATT: I guess I would go back to 16 the previous docket that Mr. Beattie mentioned, with 17 the -- with the format we used there, and with the 18 procedures we used there, as far as the same kind 19 of -- kind of weighting on the penalty and the 20 suspension. 21 We believe we have had 100 percent compliance 22 on the crossings since that case. That kind of 23 informed me on this case, that said if we follow the 24 same procedures, that we would hope that we could gain 25 the same 100 percent compliance going forward, as 0092 1 shown in the past practice. 2 COMMISSIONER JONES: And based on what 3 you said earlier, that they are reporting almost any 4 violation now, whether it is 1 gallon or 42 barrels of 5 crude -- well, I think the maximum is like 38 -- that 6 gives you some comfort as well? 7 MR. PRATT: Yes. Like I say, I have 8 received notices for one cup of material being 9 spilled. 10 COMMISSIONER JONES: And then what about 11 after one year? Let's say everything works out well 12 from the settlement agreement perspective and they 13 continue to comply, and then after one year you don't 14 have the sword of Damocles hanging over their heads, 15 right? 16 MR. PRATT: Correct. 17 COMMISSIONER JONES: So what gives you 18 comfort that it will continue? Is it the technical 19 assistance meetings that Commissioner Rendahl referred 20 to, that you will have a regular meeting of the minds 21 with the relevant authorities, or what? 22 MR. PRATT: Well, I would say with the 23 settlement agreement, we have one year that we have 24 that penalty hanging over their head. After the one 25 year ended, if we found more violations of this, I 0093 1 would probably go for the full amount of penalty 2 available to me. We would have known that there was 3 multiple technical assistance, there was a settlement 4 agreement that was agreed upon, there was a penalty 5 paid. 6 If it was after the year, we wouldn't go after 7 the previous suspended penalty, but my belief there 8 would be there was no reason for the reporting not to 9 happen. I would probably file a complaint at that 10 time, asking for the full -- the full amount 11 available. 12 COMMISSIONER JONES: Okay. Thank you. 13 That's all I have. 14 CHAIRMAN DANNER: So I guess just to 15 comment, the -- this -- this is a very large company 16 that is shipping an awful lot of commodity through the 17 state of Washington. While I don't want to question 18 the Company's commitment to compliance with our rules 19 or with safety, I -- I don't know that this amount is 20 necessarily a sword of Damocles. It seems more of a 21 Nerf sword of Damocles. 22 You know, so I am -- I think whatever we end 23 up with in this case, there is going to have to be 24 continued vigilance. I don't think if there is going 25 to be a future violation, that that would -- even 0094 1 though that might trigger the rest of this penalty, 2 that we would be foreclosed from additional 3 complaints, sanctions on those same violations in the 4 future; is that correct? 5 MR. PRATT: Yes. 6 CHAIRMAN DANNER: Okay. 7 So I do -- I don't have any more questions. I 8 do want to say I am very pleased that -- you know, for 9 all -- for all of the issues that this has brought 10 forward, it does seem to me, as Staff has commented, 11 that the Company is -- has really stepped up in terms 12 of compliance, and I appreciate that EOC has also 13 stepped up in terms of its adherence to its SOP. In 14 that regard, I am pleased. I think we are making 15 great progress here. 16 In terms of this actual case and the actual 17 settlement, it is my hope that we will take it under 18 advisement and -- when we are done with the hearing 19 today, and we will come back with our response when we 20 have one. 21 JUDGE KOPTA: Anything further? 22 COMMISSIONER JONES: No. 23 COMMISSIONER RENDAHL: No. 24 JUDGE KOPTA: One issue that we still 25 need to resolve is, the Chairman asked some questions 0095 1 about the interpretation of 47 CFR Section 171.15. I 2 would ask for some supplemental briefing on that. It 3 is not a bench request since it is a legal 4 interpretation. 5 Do you have a date by which you can provide us 6 with that? It doesn't need to be long. I would think 7 five pages at the most. 8 CHAIRMAN DANNER: I would just like some 9 citations, actually. 10 MR. DiJULIO: That's fine. And I will 11 comment further. Commissioner Jones read the 12 definition in the course of his comments and 13 questions. Water is a corrosive material. Under a 14 broad -- if you look at this definition in that 15 regard, spilling of water is a reportable incident 16 because water is a corrosive. We will provide that 17 authority, but I think consistent with the way that 18 the federal and the state application of those 19 standards has been applied, we believe that the 20 reporting will be demonstrated as appropriate. 21 We will provide that information. That should 22 go directly to Judge Kopta and not as a bench 23 response? 24 JUDGE KOPTA: It's not a bench response, 25 but it is as you would file a brief. 0096 1 MR. DIJULIO: Yes. 2 JUDGE KOPTA: It would just be with a 3 cover letter, just to Mr. King, with certificate of 4 service. 5 MR. DiJULIO: Yes. 6 JUDGE KOPTA: And by what date would you 7 anticipate? 8 MR. DiJULIO: That will be by the close 9 of business next Monday. 10 JUDGE KOPTA: One week from today? 11 MR. DiJULIO: One week. 12 JUDGE KOPTA: Okay. 13 CHAIRMAN DANNER: All right. Thank you 14 for that. 15 JUDGE KOPTA: And Staff obviously may 16 also provide its own information, or jointly with the 17 Company, whichever you prefer. 18 MR. BEATTIE: I will confer with 19 Mr. DiJulio. I anticipate, without waiving 20 opportunity to provide our own brief, but I anticipate 21 a joint response to that question. 22 JUDGE KOPTA: That would be fine. So we 23 will make that October 26th. 24 COMMISSIONER JONES: Judge Kopta? 25 JUDGE KOPTA: Yes, Commissioner Jones? 0097 1 COMMISSIONER JONES: Just a final 2 comment. I would just reiterate what Chairman Danner 3 said. Mr. Compton, thank you for coming and 4 participating in this. This is a joint 5 responsibility, as I view it. We didn't mean to put 6 you on the hot seat today for any reason other than to 7 inform this discussion, because there are various 8 places it can go. Thank you for coming. 9 MR. COMPTON: Thank you. 10 JUDGE KOPTA: Is there anything further 11 we need to discuss? 12 MR. DiJULIO: To be clear, Judge Kopta, 13 we have two bench requests, Bench Request 3 directed 14 to Staff, Bench Request No. 4 directed to the 15 Railroad, there may or may not be joint responses to 16 the bench requests, as well as the request for legal 17 authority. That's what I see as deliverables coming 18 out of this. 19 JUDGE KOPTA: Yes. I would make one 20 correction, and that was the EOC was going to provide 21 us with a response to Bench Request No. 3. 22 MR. DiJULIO: Is that possible when they 23 are not a party? 24 JUDGE KOPTA: Well, since he is here 25 testifying, then we think so. I don't think that 0098 1 there is any -- you don't have any opposition to 2 providing that information, do you, Mr. Compton? 3 MR. COMPTON: Absolutely not. 4 JUDGE KOPTA: Yes, the EOC will provide 5 that to us tomorrow. 6 And also be sure to include the docket number 7 on there so we know where it goes. 8 MR. COMPTON: Can I get that from you, 9 please? 10 JUDGE KOPTA: Yes, it is Docket 11 TR-150284. 12 MR. COMPTON: And that was Bench Request 13 No. 3? 14 JUDGE KOPTA: No. 3. 15 CHAIRMAN DANNER: Mr. DiJulio, would it 16 be your preference that you and Mr. Beattie be the 17 intermediaries of that information? 18 MR. DiJULIO: If the EOC is going to 19 cooperate, we have not objection. 20 CHAIRMAN DANNER: Okay. 21 MR. DIJULIO: There is no reason for us 22 to handle any more paper. 23 CHAIRMAN DANNER: They have been very 24 cooperative. I echo Mr. Jones's comments. Thank you 25 very much for your participation. 0099 1 MR. COMPTON: Thank you. 2 MR. BEATTIE: So just to be clear, there 3 are no bench requests directed at Staff, other than 4 informal request for briefing on the issues related to 5 Incidents 10 and 13; is that correct? 6 JUDGE KOPTA: That's correct, unless you 7 wanted to weigh in on the McKenzie valve... 8 MR. BEATTIE: Thank you. 9 JUDGE KOPTA: All right. We are 10 adjourned. 11 MR. DiJULIO: Thank you. 12 (Proceedings concluded 3:21 p.m.) 13 14 15 16 17 18 19 20 21 22 23 24 25 0100 1 C E R T I F I C A T E 2 3 STATE OF WASHINGTON 4 COUNTY OF KING 5 6 I, Sherrilyn Smith, a Certified 7 Shorthand Reporter in and for the State of Washington, 8 do hereby certify that the foregoing transcript is 9 true and accurate to the best of my knowledge, skill 10 and ability. 11 12 13 14 15 16 _____________________ 17 SHERRILYN SMITH 18 19 20 21 22 23 24 25