The Block Island Times
http://block-island.villagesoup.com/p/990094

Town takes new stand on freight rates

Proposes seasonal ferry pricing for vehicles
By Stephanie Turaj | Apr 21, 2013
Photo by: Kari Curtis

The town has submitted additional testimony to the R.I. Public Utilities Commission (PUC) that proposes ferry company Interstate Navigation should keep the existing freight rate and also reduce off-season car prices.

“Because the freight charges are of great concern to the Town, I would propose allocating the revenue generated from peak pricing to maintaining the existing freight rate and then to lessen the proposed truck rate,” town consultant Richard LaCapra said in supplemental testimony submitted to the PUC on April 17.

This position reverses a previous town position in which the town “reluctantly supported” an across-the-board freight rate increase of 34 percent. A town meeting held by the PUC on April 4 saw almost unanimous opposition to the freight rate increase, which was included in a draft agreement between the state Division of Public Utilities and Carriers and Interstate Navigation.

“The supplemental testimony expands on some of those pricing themes and offers a way to mitigate some of the impact on island residents without adversely affecting the company or its just and reasonable level of revenue requirement,” LaCapra said in the new testimony.

LaCapra’s supplemental testimony indicated that the town listened to its residents at the April 4 meeting.

“[B]ased on a great deal of feedback from the town and expanding on some issues raised in my direct testimony, I believe the impact on the Town can be mitigated with no effect on the company,” LaCapra’s testimony said.

LaCapra’s supplemental testimony states that Interstate should maintain its current peak-season (summer) vehicle rates but lower its off-season vehicle rates. LaCapra said this peak and off-peak rate structure would increase the ferry company’s total revenue by $335,993.

“I would propose reducing the rates for freight and then trucking since these are the areas which most affect the town residents,” LaCapra said in his testimony.

The draft agreement announced in March allows for Interstate to increase its revenue by $579,388 next year. The draft agreement includes an increase in freight charges, an increase in truck charges, a slight increase in passenger ticket costs and a decrease in car charges. Interstate’s proposal to increase freight rates by 34 percent would increase the company’s revenue by an estimated $272,961.

“The Town has accepted the overall revenue requirement of the settlement but would like the Commission to take note that the individual tariff increases fall harshly on the Town residents,” LaCapra said in his supplemental testimony.

In his supplemental testimony, LaCapra provides a comparison of how the rate changes proposed by Interstate affect commuters and non-commuters. For example, non-commuter cars would decrease by 22 percent, but commuter cars would increase by 21 percent.

In previous testimony March 13, LaCapra said the town expressed “reluctant support for the settlement filed.”

However, LaCapra said in his April 17 testimony, “In short, it is clear that the bulk of the increase has been shifted to the Town residents in the form of higher commuter fares and freight and truck rates,” he said. “While the town residents still enjoy a commuter rate that is still lower than non-commuter rate(s), the savings have been greatly eroded and do not well recognize the lifeline nature of the ferry to the island.”

Under LaCapra’s proposal, freight charges would not change, and the truck transport charges would increase by 3.1 percent.

The Public Utilities Commission will review and ultimately make a decision on the Interstate draft agreement. The PUC will hold a public hearing on Tuesday, April 23, at 9:30 a.m. in Warwick.

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