The Block Island Times
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Council rejects Interstate appeal

A contentious 3-2 vote
By Lars Trodson | Jul 01, 2013

In a meeting that was at turns contentious, probing and emotional, the Town Council voted Monday night 3-2 not to appeal the recent order by the Public Utilities Commission that governs a $579,388 annual revenue increase for ferry company Interstate Navigation.

Despite deciding against the appeal, the council was united in its belief that its unhappiness with the order should be made known to the state legislature, and members of the state congressional delegation.

An extensive review of the order was provided by town attorney Katherine Merolla leading up to the vote. Merolla cautioned the council that the Rhode Island Supreme Court would look upon the PUC order with “absolute deference.” She said that to file a successful legal appeal, there would have to be a finding that the PUC decision was “grossly unreasonable.” The Supreme Court is the only entity to which a PUC decision can be appealed.

“They will not go beyond the facts,” said Merolla of the state Supreme Court. “They give very, very, very deferential weight to the commission.” A seven-day window for an appeal began last Thursday, June 20, when the written order was issued by the PUC. The window closed on Thursday, June 27, which was the reason why the council scheduled this special Monday night session.

First Warden Kim Gaffett and councilors Ken Lacoste and Norris Pike voted to not seek an appeal. Councilors Chris Warfel and Sean McGarry did not agree, and were the two votes in favor of McGarry’s motion to appeal the PUC order.

Pike argued that it would be better at this point to sit down with representatives from Interstate Navigation for a “friendly conversation” and have a dialogue about what the needs of the island are.

Pike said such face-to-face meetings with Interstate have worked before, and added, about the PUC decision, that “we have to accept these decisions as they come forth.”

Warfel and McGarry argued that the PUC decision did veer from the facts, and each provided several examples where they felt the town had an opportunity to appeal.

“The decision is grossly unreasonable,” said McGarry, referring to the standard referenced by Merolla. “There is no consistency [with the PUC] from rate case to rate case to rate case. It would have been my hope to seek counsel on how we could win this thing. People have spoken to me adamantly about it.”

McGarry and Warfel also argued that the PUC simply disregarded the supplemental testimony offered by the town, which included a strong objection to freight rate increases. Testimony against the freight rate increase was offered by residents at an April 4 meeting at Town Hall with representatives from the PUC.

“Nineteen people spoke against the rate increase” at that meeting, said McGarry. “Then we submitted supplemental testimony. We made a position that could be considered that they [the PUC] did not consider all of the testimony.”

Merolla, reading from the order, said the PUC “considered that and came up with a different fact finding.”

The freight rates is almost certainly the primary difference between some townspeople and the provisions of the PUC order. A freight rate is the tariff paid by anyone bringing certain goods over on the ferry. The freight rates under the new order have increased across the board by 34 percent under the new order, and some argued that Interstate could have raised its revenue by raising vehicle rates during the peak season, among other methods.

Despite the difference of opinion, it appeared as though no one on the council was happy with the PUC.

“I don’t think anybody is listening. I’ve had that feeling before,” said Pike.

The meeting began on a contentious note. When Merolla issued a letter written by attorney Lauren Jones, a highly regarded appellate attorney, McGarry immediately took exception, saying that Merolla has “sought counsel out of her proper authorization.”

“I don’t think she sought an opinion outside her authorization,” said Gaffett. When McGarry pressed that he wanted to continue objecting to the Jones letter, and to have that letter entered into the public record, Gaffett refused, saying that Merolla was in the middle of her presentation and should be allowed to continue.

Merolla said neither she nor Jones had any agenda and added that it was “not my job to make policy, it is to provide guidance on the law.”

When McGarry continued to push and was rebuffed by Gaffett, he said that he was “offended” and added that “I’m an elected official and she’s [Merolla] an employee of the town,” a comment that drew an audible gasp from Town Manager Nancy Dodge.

The meeting was sparsely attended. Outside of the five councilors and three town officials, there were five residents in attendance and one representative from Interstate Navigation.

Bill Penn, as president of the Block Island Residents Association, said that his group “has a real problem with the process. The town cut a deal without public input. The public was not represented in this process and that was a major flaw.”

First Warden Gaffett disagreed, saying that three public hearings had been scheduled and no one from the public showed up.

Councilor Lacoste urged that the topic be continued as a “protest with the state Legislature, congressmen and senators.”

“Block Island is very unhappy with this,” said resident Bill McKernan. “We can’t just let this die.”

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