Utilities railroad right-of-way crossing permission requirement and procedure establishment

Disputes between railroad and utility companies will have an easier resolution thanks to legislation passed this year.

Currently, railroads and utilities come to terms about agreements for utilities to run fiber optics, sewer, electrical, gas, and other lines under railroad right-of-ways. However, this has led to some problems. Utilities feel they are being charged excessive rates even though they are in state highway rights-of-way.

This bill provides an official process that utilities and railroad companies can follow when a utility needs to cross a railroad right-of-way. It creates a permission process, construction schedule, and a standard crossing fee of $750 per crossing and additional costs for which a utility may have to reimburse railroads (specified in the bill). The bill also allows contracts where both entities are satisfied to continue.

The bill allows construction to begin 30 days after the railroad receives the crossing application, fee, and certificate of insurance, unless the railroad notifies the utility in writing of any concerns. Insurance minimums applicable in various circumstances must also be specified, including protective liability insurance and general liability insurance, with gas or other hazardous materials having higher levels of coverage. It also includes a dispute resolution process. The process has the Public Utilities Commission (PUC) hold a hearing and issue orders within a specified timeline.

This legislation is very similar to a South Dakota bill that became effective in July 2014. The bill addressed a similar issue South Dakota was having when utilities were looking to cross railroad right-of-ways. South Dakota also legislated a $750 onetime fee per crossing with certain reimbursements to railroads. (S.F. 877)

Senate DFL Media