The Block Island Times

Residents to PUC: Don't raise freight rates

PUC to assess input and vote by May 24
By Stephanie Turaj | Apr 05, 2013
Photo by: Kari Curtis At a Public Utilities Commission hearing on Thursday at Town Hall, island resident John Cullen said that an increase in ferry freight rates would have a negative impact on his businesses and his family.

Nearly every one of the island residents that spoke at a public hearing about the draft agreement with Interstate Navigation had the same message: raising ferry freight rates by 34 percent would hurt the Block Island economy.

If I raise my prices any more, people are going to stop buying, and if I absorb the prices, I’m going to go out of business,” said John Cullen, whose family operates two stores on the island. This was pretty much the tone of the meeting.

The public hearing was sponsored by the R.I. Public Utilities Commission, which will review and ultimately make a decision on the new Interstate revenue proposal. The draft agreement with Interstate and the town, which was announced at a Town Council meeting last month, includes an increase in freight charges, an increase in truck charges, a slight increase in passenger ticket costs and a decrease in car charges. This agreement was reached between the R.I. Division of Public Utilities and Carriers and Interstate. It allows for Interstate to increase its revenue by $579,388 next year.

Bill Penn, President of the Block Island Residents Association (BIRA), read a statement about the rate agreement thanking the ferry company for maintaining the commuter cards but concluded with a criticism of the freight increase.

“BIRA is deeply concerned with some of the other components of the increase that will cause harm to the island and its economy,” said Penn. “This increase in [freight] rates will be felt throughout the island economy.”

Island resident and former Town Councilor Dick Martin agreed.

“I’ve seen a lot of businesses go away because they can’t afford Block Island. It’s not a dig toward Interstate or Block Island — it’s a Block Island factor. We are a small village and we all are trying to survive,” said Martin. “We’re all not millionaires out here.”

Town Councilor Chris Warfel said that while he calls many Interstate employees friends, he is “not in favor of this rate increase.” He said that the current freight rates are “not realistic,” as they charge the same rates for completely different items.Michael McElroy, Interstate’s attorney, spoke on behalf of the ferry company.“In any settlement, you never get everything you want,” he said. “But every issue was addressed, and we tried to do what was the best for all parties concerned.”

McElroy said that overall rates have not increased in five years.Town Councilor Sean McGarry added that proposed increases to truck rates would also hurt island businesses.

“Ninety percent of our freight comes over on trucks,” he said. “When we raise that linear footage for the trucks, that impact is 10 times what the impact is on the loose freight.”

Island residents also took issue with Interstate’s proposal to decrease car rates. The town has traditionally worked to keep on-island traffic down.

“It is my belief that the across-the board freight increase and decrease on cars is a direct attack on long-term viability,” said Patricia Murphy, an island resident and a member of the Block Island Housing Board and the Block Island Economic Development group.

“On weekends during the summer, the ferry sells out months in advance,” said island resident Bill Comings, speaking about vehicle reservations. “It makes no sense to reduce those rates.”

Interstate attorney McElroy said the company was not trying to increase the number of cars to the island. He claimed that the company had fewer vehicles come over by ferry last summer, and Interstate wants to “get back to where we were before.”

Block Island Grocery Store owner Mary Jane Balser agreed that the proposal to reduce the car rates does not make business sense.

“Charge people in the summer — leave the rates alone in the winter,” said Balser.

Island resident Peter Saxon made a similar proposal.“We don’t need more cars over the island in the summer,” said Saxon. “Raise the rates for cars in June to September, reduce the rates over the winter and, if necessary, use smaller ferries.”

Island resident Judy Tierney also added that Interstate should look at increasing its off-season winter boat schedule.

“Those of us who work full-time or part-time can’t always give a full day to be on the mainland,” said Tierney.

The PUC made no action on the draft rate agreement at this public hearing. At the end of the hearing, Chairman Elia Germani said, “This has been fascinating. It gave us a lot to think about — the information, the passion.”

The PUC will approve or reject the draft or agreement within the next month. If approved, it will go into effect on May 24. The PUC is a regulatory agency overseeing energy and transportation, including ferry boats.

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