The Milwaukee Road (MILW) rejecting GE's offer to modernize their electric mainline has proven to be one of the most fatal mistakes in American railroading history. Not only because of how much it proceeded to finish off the already-struggling railroad due to the oil crises making dieselization a then-dangerous choice but also the amount of potential being wasted by MILW's rejection of GE's offer given that GE was gonna do that stuff on their own pocket without MILW paying anything.
Now what if the Milwaukee Road realized how much this offer was going to save them (it at least for a few years) vs dieselizing like every other American railroad, accepting GE's offer to convert the 3000 V electric line to 25 kV AC and close the gap in Washington state? Well for one thing it would leave them in an overall better financial state and at least let them hold their ground just long enough to be acquired by another company as opposed to being stripped and sold for parts (with most going to the Soo Line). In 1980, rather than shutting down, the Milwaukee Road lets itself be acquired by Union Pacific. Union Pacific wanted access to Chicago for themselves. Previously they relied on proxies like the Chicago & Northwestern to have their cargo go to/from Chicago. There was also a desire to compete with Burlington Northern in the Pacific Northwest Market. Even though they had a line that took their trains to Portland, it was indirect, slow and winding. The Milwaukee Road's mainline to Seattle offered a much more direct route.
Upon acquiring the Milwaukee Road, Union Pacific was caught in a dilemma, as it dealt with a conservative board of directors who wanted the route de-electrified to supposedly make things easier from a logistic standpoint, but progressive factions countered saying that dieselizing the line would make them forfeit their share in the Pacific Northwest to the Burlington Northern behemoth. Thus the board relented and let UP keep the electrified line, but they could not take this victory for granted. Beginning in 1983, UP would collaborate with GE and Brown, Bovery & Cie to construct a catenary slug derived from the upcoming Dash 8 series to minimize disruption caused by having to swap locomotives at harlowtown. UP would also build a new intermodal facility in Harlowtown to take advantage of the budding intermodal market. Shippers from East Asia were coming to Seattle and Tacoma, and they wanted their goods delivered ASAP. Although Burlington Northern had more coverage, it was saddled with slow diesel locomotives that ground to a crawl on the mountain grades. UP's electric line had no such disadvantages, allowing them to deliver goods much faster, even taking into account the switch at Harlowtown. Flush with cash from wooing Pacific shippers and saving on fuel costs, Union Pacific would also begin targeted electrification at the Overland line from Omaha to Ogden, as well as from Harlowtown to Minneapolis-St. Paul. As these were new electric lines, they were built to 25 ft clearance to allow double stack freights, requiring rebuilding bridges and underpasses.
With intermodal companies serving the Seattle area favoring Union Pacific's electric line, Burlington Northern realized it could not take its scale for granted, as its monopoly was now contested. In 1982, Burlington Northern acquired Western Pacific, giving them direct access to the San Francisco Bay Area, and in 1985 Burlington Northern acquired Denver & Rio Grande Western. This gave them a complete mainline from Chicago to the San Francisco Bay Area, countering Union Pacific's complete Chicago-Pacific Northwest Mainline. Burlington Northern's complete mainline from the Bay Area to Chicago. ends up suffocating a declining Southern Pacific.
In an attempt to save itself, Southern Pacific attempted to merge with the Atchison, Topeka & Santa Fe but the Interstate Commerce Commission rejected it due to the high level of overlap. With nowhere to go, Southern Pacific began to sell its lines piece by piece in an attempt to stay afloat. The St. Louis-Southwestern railroad (save for the Rock Island line SP acquired in the early 80s), the Coast line from Los Angeles to San Francisco (including the Dumbarton Bridge line), and the Valley Subdivision (Los Angeles-Palmdale) were sold to Burlington Northern by the end of the 80s. Southern Pacific also gave Burlington Northern trackage rights to use the Valley Subdivision up to Stockton, the Mojave subdivision from Bakersfield to Palmdale, and their port to Los Angeles. Southern Pacific would also have trackage rights to the ex-SSW line in order for freights from Houston to directly get to Chicago. As part of acquiring the Coast Line, Burlington Northern assumed operations of the Peninsula Commute from San Francisco to San Jose.
Burlington Northern begins the process of rebuilding and modernizing the dilapidated Coast Line to make it their premiere north-south freight line from LA to the Bay Area, installing new signalling, grade separating where necessary, and double-tracking the line as much as they can.
Even with these divestments, Southern Pacific decided to raise the white flag, and in 1993 they were acquired by Union Pacific. To satisfy the ICC, Southern Pacific had to terminate their trackage rights to the ex-SSW line as UP now had the Missouri Pacific line that parallelled it. In 1996, the Atchison, Topea & Santa Fe merged with Burlington Northern to form BNSF Railway. Once again ICC concessions were made. Burlington Northern had to terminate much of their trackage rights to the Valley Subdivision. As a compromise to have acccess to the ex-Western Pacific line, BNSF keeps trackage rights to the Fresno Subdivision between Fresno and Stockton. In exchange, UP gains trackage rights to BNSF's ex-Santa Fe Line from Richmond to Fresno.
As UP's acquitision of the Milwaukee Road came at the expense of Chicago & Northwestern, the CNW was acquired by Canadian Pacific in 1996. After 1996, BNSF sold the Valley Subdivision to Metrolink (though they would have trackage rights to it). They would also sell the Coast Line to Amtrak (Ventura-Salinas), Metrolink (Moorpark-Ventura) and Caltrain (Salinas-Tamien, including the Monterey and Santa Cruz linee) across the 2000s, as they now have the Santa Fe line as their own north-south freight line.
With the GE E60s reaching the end of their life cycles, UP began the process of replacing them with new catenary slugs done jointly between GE and Adtranz (later Bombardier Transportation) in the late 90s, derived from the GE Evolution series. The last of the E60s were retired in 2005. During this time, UP had been gradually electrifying the remaining mainline from Minneapolis-St. Paul to Chicago (both via Milwaukee and the Mississippi River), as well as the MILW mainline from Omaha through Iowa. Upon acquiring SP, UP would begin electrifying the Overland line from Ogden to California, as well as the Oregon Short Line from Ogden to Portland via Idaho (including a branch from Hinkley through Pasco onto Beverly where it connects with the MILW line), and the mainline from Ogden down to Los Angeles.
After completing electrification of the Overland and Oregon Short Line in the early-mid-2010s, UP began the process of rebuilding the MILW Pacific Extension between Beverly and Harlowtown to accomodate 25 KV AC and double stack freights.
Not wanting to be left behind by a powerful and modern UP, BNSF begins electrifying the Southern Transcon, the Feather River line from California to Salt Lake City, the DRGW line from Ogden to short of the Moffat Tunnel, and the CBQ line from Chicago to Denver.
This arms race in the western states starts to induce inertia towards targeted electrification to the north. The moment Canadian Pacific acquired Chicago & Northwestern, they were not directly competing in the upper midwest market. Sandwiched between BNSF's sheer scale and UP's electrified high velocity freights, Canadian Pacific was at risk of losing its Chicago-Vancouver freights to UP's and BNSF's Chicago-Seattle lines. Thus starting in the 2000s they began their own targeted electrification of their mainline from Vancouver to Winnipeg and from Winnipeg into the Midwest.