WARWICK – The R.I. Division of Public Utilities and Carriers on Friday opened an investigative docket to look into the “needs and appropriateness” of Interstate Navigation Co.’s plans to replace one of its Block Island ferries with a 500-passenger high-speed ferry.
Interstate Navigation operates Block Island Ferry’s traditional and fast-ferry services to the island from Newport, Narragansett and Fall River.
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The investigative docket was opened in accordance with DPUC hearing officer John Spirito Jr.’s Jan. 4 order to deny Interstate Navigation’s request for approval to finance the new, larger high-speed ferry, according to an email sent Friday by the DPUC to legal counsel representing Interstate Navigation, as well as to DPUC staff, the R.I. Office of Attorney General, New Shoreham Town Solicitor Katherine Merolla and Rhode Island Fast Ferry President Charles A. Donadio Jr.
In late December, Interstate Navigation asked the DPUC for approval to borrow $8.5 million from The Washington Trust Co. to construct a $10.5 million high-speed ferry to replace the 250-passenger Athena vessel that currently sails out of Narragansett. That vessel would then be repurposed for ferry runs from Newport.
The new high-speed ferry would address issues of Block Island fast-ferry service regularly selling out and bring more than 21,000 passengers annually to the island, according to pre-filed testimony by B&E Consulting LLC President David G. Bebyn.
However, in his 22-page decision to deny Interstate Navigation’s request, Spirito wrote that a new docket should be opened to investigate Interstate Navigation’s need for a larger ferry. As part of the investigation, Spirito asked to “evaluate” whether the ferry company’s plans are “designed to thwart” North Kingstown-based Rhode Island Fast Ferry’s entry into the market and whether the DPUC should place a moratorium on Interstate Navigation’s ferry plans “to protect the public interest.”
Rhode Island Fast Ferry, Interstate Navigation and the town of New Shoreham have been in a legal battle for more than five years over Donadio’s plan to offer seasonal fast-ferry service from Quonset Point to Old Harbor on Block Island. The DPUC approved Donadio’s application in September 2016. That decision is currently under appeal in R.I. Superior Court.
Interstate Navigation argues it could lose fast-ferry passengers if Donadio’s seasonal fast-ferry service moves forward, and says that additional fast-ferry service to the island is not needed because Block Island is “saturated.”
In addition to questioning Interstate Navigation’s timing of the vessel request, Spirito cited a past instance in which the DPUC, in 1999, placed a three-year moratorium on Interstate Navigation “from engaging in high-speed ferry services.” Spirito wrote that Interstate Navigation appealed a DPUC ruling in 1998 that granted Island Hi-Speed Ferry a license to operate service to Block Island at the time. Spirito wrote that before Island Hi-Speed Ferry could place its ferry into service and while the appeal was pending, Interstate Navigation “attempted to beat” Island Hi-Speed Ferry to the market by placing its own high-speed ferry into operation.
“The Division also expressed concern that Interstate was attempting to ‘wield its monopoly strength to dominate the entire ferry market and thus thwart all the [Division’s] regulatory objectives,’ ” Spirito wrote. “The record in this docket suggests that Interstate is again attempting to dominate the high-speed ferry market and thwart the Division’s regulatory objectives.”
DPUC spokesperson Terry Mercer said Friday that DPUC personnel, and possibly consultants, will investigate “the exact matter” of what the order asked to examine. He said there most likely won’t be hearings “on the outset,” and couldn’t elaborate on how the investigation would proceed.
Schacht & McElroy Managing Partner Michael McElroy, the attorney representing Interstate Navigation, declined comment Friday.
James A. Hall, attorney for Providence-based Adler Pollock & Sheehan PC, which is representing Rhode Island Fast Ferry, said Friday in a statement that Rhode Island Fast Ferry “looks forward” to the investigation to see if Interstate Navigation “and/or those working in concert with Interstate engaged in anti-competitive behaviors.”
James Bessette is a PBN staff writer. Email him at Research@PBN.com.
