How many cars are too many on Block Island?

TROUBLED WATER? Block Island ferry operator Interstate Navigation Co. is seeking a rate hike for 2013, one that could see an end to discounts for island residents and bring more cars to the community. / COURTESY BLOCK ISLAND TOURISM COUNCIL
TROUBLED WATER? Block Island ferry operator Interstate Navigation Co. is seeking a rate hike for 2013, one that could see an end to discounts for island residents and bring more cars to the community. / COURTESY BLOCK ISLAND TOURISM COUNCIL

Block Islanders like Brad Marthens, co-owner of the Atlantic Inn hotel, expected ferry operator Interstate Navigation Co. Inc. to seek rate hikes in 2013 after running year-round service to the island under the same state-controlled price structure for the last six years.
But the nature of the changes – which would entice more cars and end discounts for island residents – turned out to be more radical than Marthens and other local business owners were ready for.
“The ferry does a great job for the island, and they are talking about a new high-speed service from Newport, which is great, but what concerns me personally is the number of cars we have here already and why you would want to lower rates for them,” Marthens said about Interstate’s proposal to the state Public Utilities Commission seeking a $1.3 million, or 13 percent, total increase in revenue from conventional, slow-speed ferry rates. “And if you [exclude] the part-time residents, islanders don’t make as much money as people think.”
In addition to the passenger-rate changes, Interstate has also asked for a 65 percent increase in most categories of freight, a possibility that could push prices on the island up substantially.
Now the R.I. Public Utilities Commission will begin the process of deciding how much change Interstate should get and how much islanders can endure.
A central question is how closely the cost of carrying each passenger, car or piece of cargo should match the rates charged, or whether some services, and users, should be charged more than others.
Full-time island residents have long enjoyed a discount on ferry rates while car traffic has been discouraged with a premium on the ferry. Similarly, same-day, round-trip tickets have been discounted over separate one-way tickets.
But Interstate points out that it costs no less to carry an islander across Block Island Sound than a visitor and artificially high automobile rates are leaving the ferry with empty space on many runs.
These incongruities, Interstate said in its rate-change application, have helped drive persistent annual operating losses for the year-round, slow ferry of nearly $500,000 per year. The losses have been covered by rising profits in the high-speed ferry service to the island, but over the long term should be eliminated or minimized, Interstate said.
“If it weren’t for the great success that Interstate has had growing the fast-ferry business, the [2007] rate plan would have been a miserable failure,” said Walter E. Edge Jr., vice president of B&E Consulting LLC of Providence, in remarks representing Interstate in its state rate application. “Interstate is no longer willing to take all the risk of the fast-ferry service and give all of the benefits to the ratepayers.”
Under Interstate’s rate proposal, the cost of a one-way adult ticket would rise 95 cents, from $11.25 to $12.20, but there would be no same-day, round-trip discount – now worth $4.20 off the price of two, one-way tickets.
And the Islander discount, which now saves full-time residents $12 off the cost of two one-way tickets and $22.80 off the $49.80 cost of bringing a car over, would be eliminated.
Instead of offering discounts for islanders and same-day round trips, Interstate would like to give discounts for midweek trips (Monday to Thursday) to encourage ridership during those quieter times on the island. The company would also like to be allowed to offer nonmonetary discounts, now forbidden, such as a free hotdog with each child’s ticket.
To fill up the now empty ferry automobile deck, Interstate would lower the price of bringing a car over from $49.80 to $32.70 and the truck price from $60.10 to $39.45.
But encouraging more people to take cars to Block Island is exactly what islanders have been fighting for years, intentionally pushing the state to shift fare increases onto automobile trips instead of passengers, especially full-time residents.
“We have some serious concerns,” said New Shoreham Town Manager Nancy Dodge about the proposal. “The town is very concerned about keeping some form of commuter [resident] fare, about the increases in freight and not reducing the price of automobiles. The travel that the islanders do on the ferry is generally not for pleasure: it is a lifeline and everything seems to be getting more expensive out here.” While ferry rates are ultimately set by the Public Utilities Commission, the town’s position on proposed changes plays a large role in what the state agency will allow.
The town has hired two consultants to represent it in ferry negotiations this year and Dodge said she hopes the two sides can come to an agreement that avoids the cost of hiring lawyers to contest the issue through a full round of hearings.
On the islander discount, Dodge said the town realizes that the disparity between what residents and everyone else pays has grown over the years and is prepared to make some adjustment as long as some discount remains.
Interstate has asked for the new rates to be set before the summer season and the PUC has scheduled hearings through April and ending in May.
While rate increases of any kind don’t help and a potential increase in car traffic is generally viewed as a negative, the potential for midweek discounts is attractive, as is Interstate’s plan to replace its old Newport-to-Block Island service with a high-speed ferry starting this summer.
“The bigger issue on tourism is the negative impression of visitors seeing the rates going up, even though everything they are proposing is going to have a much bigger impact on those living here and running a business,” said Block Island Tourism Council Executive Director Jessica Willi. “On the positive side, the fact that there is more demand for high-speed service is great and getting it from Newport is great, because they do such a great job with tourism and marketing.”
Renovating the ferry that will provide high-speed service from Newport is estimated to cost Interstate $1 million and the company is also building an office near the Point Judith ferry terminal in Narragansett in order to relocate its headquarters there from New London, Conn., this summer. The new building is also expected to cost $1 million.
Interstate Vice President Joshua Linda acknowledged that the company is unlikely to see the rate proposal emerge from the PUC unchanged. •

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