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Block Island ferry rate increase sought in Rhode Island

By ALEX KUFFNER The Providence Journal

Publication: theday.com

Published December 27. 2012 8:00AM   Updated December 27. 2012 11:51PM

The company that operates the Block Island Ferry in Point Judith has filed a request with Rhode Island regulators to raise passenger ticket prices by about 8 percent next year on traditional, "slow" ferries to account for rising fuel costs and upgrades to its fleet.

Interstate Navigation would also eliminate a same-day travel discount and a discount for Block Island residents, but it also plans to offer much lower rates to transport vehicles.

The New London-based company operates the main ferry service connecting Block Island to the mainland, with both traditional and fast ferries to Point Judith in Narragansett and Newport.

"I understand why we had to spend significant dollars improving our vessels and terminals in order to compete in this tourist-driven market," Interstate Navigation vice president Joshua Linda said in written testimony to the Rhode Island Public Utilities Commission. "Our recent efforts have been directed toward entering the fast ferry market, which is something for which our summer tourist customers have shown a clear preference."

In the rate filing that was submitted to the PUC last month, Interstate Navigation says its newer fast-ferry service to Block Island from Point Judith has subsidized losses in its traditional, slower service that have amounted to $500,000 annually over the past four years.

It has requested the rate change to increase revenues for the traditional service. If the PUC approves the proposal, annual revenues would go up by $1.3 million, or 13.2 percent.

Under the proposal that would affect traditional ferries only, adult one-way trips would increase by 95 cents to $12.20 and child tickets would go up by 45 cents to $6.15. However, rates for vehicles would be slashed, with the one-way price for a car dropping from $49.80 to $32.70 and the price for a truck going from $60.10 to $39.45.

A $4.20 discount for same-day, round-trip tickets would be eliminated, as would the $7.80 discount for island residents who qualify for the commuter rate. Islanders would also lose their discount vehicle rates.

"From a cost-allocation rate-setting point of view, Islanders should not get this discount," Walter E. Edge Jr., a Providence consultant hired by Interstate Navigation, said in testimony. "It costs no more or less to sell Islanders a ticket and carry them on the vessel than it costs for any other passenger."

But Interstate Navigation has proposed creating a weekday discount of up to 25 percent between May and September to encourage travel during off-peak times.

The company has requested that the new rates go into effect before Memorial Day next year.

Interstate Navigation's expansion of its fast ferry service is set to continue. The company says in the filing that it intends to eliminate its traditional ferry from Newport to Block Island and replace it with a fast ferry that it purchased for $440,000 and is refurbishing at a cost of $1 million. Tickets for the new service would cost $25 each way.

Interstate's current rates were determined in 2007 as part of a five-year plan that was extended to a sixth year. As part of that plan, rates were frozen in the first two years and increases in subsequent years were restricted.

akuffner@providencejournal.com

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