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Finally, as a third step after rehabilitating and enhancing the system, the 1998 ''Rapid Rail Study'' proposed electrification.<ref name=98RRS /> By itself, electrification was not projected to significantly improve service, and the high estimated cost of electrification and its lower priority meant electrification would be deferred.<ref name=98RRS /><ref name=SFC-980928>{{cite news |url=http://www.sfgate.com/bayarea/article/Caltrain-Wants-Fast-Electric-S-F-San-Jose-Rail-2988377.php |title=Caltrain Wants Fast Electric S.F.-San Jose Rail Link / It must decide whether to do repairs first |author=Pimentel, Benjamin |date=28 September 1998 |newspaper=San Francisco Chronicle |accessdate=25 March 2017}}</ref> Some of the money to accomplish the rehabilitation and enhancement of existing track came from funds that had been intended for the downtown extension.<ref name=SFC-980928 /> Steve Schmidt, a councilman from [[Menlo Park, California|Menlo Park]], argued that electrification instead should be the top priority to make the rail line more palatable to neighbors, citing improvements in noise and pollution.<ref name=SFC-980928 /> Other advocates for electrification of Caltrain noted the $1.2 billion [[Bay Area Rapid Transit|BART]] extension to [[San Francisco International Airport]] may have revived the decades-old dream of BART around the Bay, which would render an electrified Caltrain redundant.<ref name=SFC-980928 /> The electrification of Caltrain was seen as a prerequisite for a dramatic expansion of the system in a future phase, including service to [[Union City, California|Union City]] across the [[Dumbarton Rail Bridge]] and increased service to [[Gilroy, California|Gilroy]].<ref name=98RRS />
===Caltrain 2025 and FRA waiver===
Once CTX was complete, marking an end to the rehabilitation and enhancement phases proposed in the 1998 ''Rapid Rail Study'', Caltrain leadership turned their sights back to electrification. Members began working on a plan known as "Caltrain 2025".<ref>{{cite news |url=http://www.caltrain.org/caltrain2025.html |title=Caltrain 2025 |author=<!--staff writer(s); no by-line.--> |date=2007 |publisher=Peninsula Corridor Joint Powers Board |accessdate=28 March 2017 |archiveurl=https://web.archive.org/web/20071021073827/http://www.caltrain.org/caltrain2025.html |archivedate=21 October 2007 |deadurl=yes}}</ref> Informally meeting during fall 2005, these meetings culminated in an August 2006 presentation to PCJPB for a wish list of items, including electrification, totaling $3.9 billion to meet projected capacity demands.<ref name=ProgRail>{{cite magazine |url=http://www.progressiverailroading.com/passenger_rail/article/At-Caltrain-running-electric-multiple-units-is-a-key-component-of-the-agencys-long-term-growth-plans--32040 |title=At Caltrain, running electric multiple units is a key component of the agency's long-term growth plans |author=Cotey, Angela |date=July 2007 |magazine=Progressive Railroading |accessdate=28 March 2017}}</ref> Caltrain 2025 included the following elements:<ref name=ProgRail /><ref name=Project2025>{{cite report |url=http://www.caltrain.org/pdf/project2025/Project2025_REPORT_113006.pdf |title=Project 2025 |author= |date=30 November 2006 |publisher=Peninsula Corridor Joint Powers Board |accessdate=29 March 2017 |archiveurl=https://web.archive.org/web/20071026221620/http://www.caltrain.org/pdf/project2025/Project2025_REPORT_113006.pdf |archivedate=26 October 2007 |deadurl=yes}}</ref>
* Use of lightweight electric multiple units (EMUs) on heavy rail lines ($296 million to $1.024 billion)
* Install positive train control (PTC) system to eliminate the possibility of a collision between EMU and freight trains ($30 million)
* Electrification infrastructure ($496 million)
* Other infrastructure upgrades, including the addition of track between Santa Clara and San Jose Diridon to alleviate traffic on this section, which is shared between three passenger rail agencies ([[Altamont Corridor Express]], [[Capitol Corridor]], Caltrain) and [[Union Pacific Railroad|Union Pacific]] freight; rebuilding station platforms to facilitate level boarding; and rebuilding 4th and King to add a mezzanine level so boarding and unloading can happen simultaneously ($1.044 billion)
[[File:Stadler KISS of CFL in Trier in July 2014.jpg|thumb|right|Under Appendix A of [[Title 49 of the Code of Federal Regulations|49 CFR]] 211, light rail vehicles such as this [[Stadler KISS]] belonging to [[Luxembourg]]'s [[Société Nationale des Chemins de Fer Luxembourgeois|CFL]] are not allowed to share rail lines with heavy freight trains.]]
PCJPB mandated that Peninsula Corridor infrastructure and equipment should be compatible with future [[California High-Speed Rail|California High-Speed Rail Authority]] (CHSRA) trains.<ref name=ProgRail /> CHSRA had proposed that mandated speeds and transit times could be met by using lightweight "non-compliant" vehicles,<ref name=ProgRail /> meaning a rail vehicle that did not comply with Federal requirements. These requirements include separation between light and heavy rail equipment<ref>{{CodeFedReg |49|211|subpart=F|prefix=Appendix|A}}</ref> and structural strength.<ref>{{CodeFedReg |49|238|subpart=C}}</ref> Caltrain saw this as an opportunity to apply for an FRA waiver to run EMUs, which could accelerate faster and provide headways as low as five minutes.<ref name=FRAwaiver>{{cite report |url=http://www.caltrain.com/Assets/Caltrain+Modernization+Program/Documents/FRA+Waiver+2009/Caltrain+Mixed+Traffic+Request.pdf |title=Petition of Peninsula Joint Powers Board / Caltrain for approval of mixed use and waiver of certain federal railroad administration regulations pursuant to 49 C.F.R. Section 238.203, 49 C.F.R. Section 238.205, 49 C.F.R. Section 238.207, 49 C.F.R. Section 238.211, 49 C.F.R. Section 238.213 |author=Peninsula Corridor Joint Powers Board |date=December 2009 |publisher=Peninsula Corridor Joint Powers Board |accessdate=30 March 2017}}</ref> The December 2009 FRA waiver application included temporal separation of passenger and freight rail traffic north of Santa Clara, where freight traffic was restricted to the nonrevenue hours between midnight and 5 A.M.; it also included the deployment of an enhanced PTC system, which Caltrain named CBOSS, designed to not only enforce positive train control, but also check for overspeed and protect rail workers.<ref name=FRAwaiver />
PTC had already been mandated by the [[Rail Safety Improvement Act of 2008]], enacted in the wake of the fatal [[2008 Chatsworth train collision]] crash; CBOSS includes Caltrain's implementation of the new regulations.<ref name=FRAwaiver /> In the FRA waiver application, Caltrain proposed a defense-in-depth philosophy for collisions: first reduce the probability of collisions to nearly zero by employing temporal and spatial (PTC) separation from freight rail; then mitigate the impact of a collision by deploying vehicles with crash energy management (CEM) structures.<ref name=FRAwaiver /> The application was docketed as FRA-2009-0124.<ref>{{cite web |url=https://www.regulations.gov/docket?D=FRA-2009-0124 |title=FRA-2009-0124 Caltrain – Waiver Petition |author=<!--Staff writer(s); no by-line.--> |date=2016 |publisher=Federal Railroad Administration, Department of Transportation |accessdate=30 March 2017}}</ref> After review, the FRA waiver was granted in May 2010, marking the first time EMUs were allowed to share rails with freight in the United States.<ref>{{cite news |url=http://www.mercurynews.com/2010/05/27/electric-train-plan-granted-key-waiver/ |title=Electric train plan granted key waiver |author=Rosenberg, Mike |date=27 May 2010 |newspaper=San Jose Mercury News |accessdate=30 March 2017}}</ref> The grant was conditioned on meeting nine additional requirements, including demonstrating minimum crashworthiness, seating, improving grade crossing, meeting FRA PTC standards in 49 CFR 236<ref>{{CodeFedReg |49|236|subpart=I}}</ref> with CBOSS, formalizing the temporal separation plan, and issuing a safety system program.<ref>{{cite letter |url=https://www.regulations.gov/contentStreamer?documentId=FRA-2009-0124-0014&attachmentNumber=1&contentType=pdf |last=Cothen Jr. |first=Grady C. |recipient=Michael Scanlon |subject=Docket Number FRA-2009-0124 |date=27 May 2010 |accessdate=30 March 2017}}</ref>
Caltrain applied for an amendment to the 2009 waiver in 2015, noting that since the previous waiver had been granted, new developments had taken place, including formalized rules that commuter rail vehicles meeting EN12663 and EN15227 were explicitly acceptable for mixed-use service (light and heavy rail) without temporal separation.<ref>{{cite letter |url=https://www.regulations.gov/contentStreamer?documentId=FRA-2009-0124-0018&attachmentNumber=1&contentType=pdf |last=Hartnett |first=Jim |recipient=Ronald Hynes |subject=Peninsula Corridor Joint Powers Board Waiver, Docket Number FRA-2009-0124 |date=22 September 2015 |accessdate=30 March 2017}}</ref> The amendment was granted in January 2016.<ref>{{cite letter |url=https://www.regulations.gov/contentStreamer?documentId=FRA-2009-0124-0019&attachmentNumber=1&contentType=pdf |last=Lauby |first=Robert C. |recipient=Jim Hartnett |date= |subject=Docket Number FRA-2009-0124 |accessdate=30 March 2017}}</ref>
===Caltrain/HSR blended system===
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