The Block Island Times

Interstate to keep commuter cards

Settlement with PUC in the works
By Stephanie Turaj | Mar 10, 2013
Photo by: Stephanie Turaj Richard LaCapra explains the draft agreement to the Town Council and audience members at the council's Monday meeting.

A joint draft agreement between Interstate Navigation and the Division of Public Utilities and Carriers proposes to raise Interstate’s earning cap by $580,000, about half of the company’s request of $1.3 million. The draft agreement also took into account a number of requests from the town of New Shoreham.

“The settlement basically brings us to where we wanted to be, by-and-large,” said Richard LaCapra, the consultant who is negotiating with Interstate on behalf of the town. The draft agreement was announced at the Town Council’s March 4 meeting.

The agreement will be sent to the state Public Utilities Commission, and if approved will go into effect on May 24. The PUC is a regulatory agency overseeing energy and transportation, including ferry boats.

According to the agreement, Interstate agrees to keep the island commuter cards, which provide discounts to the island’s year round residents. The round-trip passenger commuter rate would be $16.

Also under the proposal, freight charges would see a 34 percent increase — the original request was a 65 percent increase on freight.

“Every rate case gets chopped in half,” said Town Councilor Chris Warfel.

Vehicle rates will decrease, but not as much as Interstate first proposed. The town has traditionally worked to keep on-island vehicle traffic down.

“The issues that we raised and discussed here at the council have largely been implemented and incorporated into this settlement,” said LaCapra.

At the council meeting, LaCapra explained that he had approached Interstate with four main requests, with the purpose of establishing a dialogue between the town and the ferry company. Instead, Interstate went into private discussion with the PUC Division. Out of that private discussion, the draft settlement agreement arose, and was forwarded to the Town Council for input.

“The settlement brings into account a flexible pricing arrangement, which allows the company to change its pricing, up or down somewhat, and not go through the approval process,” LaCapra said.

According to the agreement, Interstate can choose to raise or decrease some prices by up to 10 percent throughout the year without having to return to the PUC for approval. It cannot change prices on commuter rates or freight. The council voted to support an even higher flexibility margin of pricing change — 20 to 30 percent — which can be added to the final agreement.

Also, the settlement allows profits from the Interstate high-speed ferries to be included in the ferry’s earnings report for the traditional ferry.

Councilor Chris Warfel said he thought some of what the town had asked for was not included in the draft agreement. “There’s some other things we communicated,” he said.

Not included in the agreement was assurance from the ferry company that the company would maintain at least its current winter boat schedule. The Town Council voted to request this be added in to the agreement.

Warfel suggested that the council additionally ask for an improved winter boat schedule.

“The Tuesday/Wednesday one-boat day to go and not come back ... it’s less than convenient, to put it mildly,” he said. LaCapra advised that the town best meet with Interstate on this because it is separate from the rate filing.

The council also voted to approach Interstate with another request: that the town and Interstate hire a third-party consultant to review the company’s freight charges within the next year.

While there’s a proposed 34 percent across-the-board increase, freight charges for different items vary. (For example, the freight charge for a washing machine is currently $9, a jacuzzi $30 and a gas weedwhacker is $6.80.)

“This is a most absurd way of doing rate-making I have ever heard of, where you take a broken freight tariff and just increase it ... across the board,” said Warfel, referring to the 34-percent increase. “I was adamant that it should be cost-justified.”

The Town Council authorized Richard LaCapra to file testimony with the PUC explaining the town’s position on the settlement agreement. The town will also seek an extension of time to file the testimony that is due by March 12 — to allow for the council to accept public input on the settlement agreement.

A link to the settlement agreement draft is available at:

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