Ferry service to be probed
The Division of Public Utilities and Carriers will be looking into whether Prudence Island Ferry Inc., is providing adequate service.
During a second hearing to determine whether or not A&R Marine should be granted a certificate of public convenience and necessity Thursday, Christy L. Hetherington, special assistant attorney general, said that "in the interest of full disclosure, there will be in the near future … an informal summary investigation … to review the adequacy of service," of Prudence Island Ferry Inc.
The decision to investigate, she said, came about after reviewing the transcript from the first hearing for A&R Marine's application Oct. 29. During that hearing, some ferry riders said the ferry's cabin wasn't heated, the bathroom was constantly locked and notices of cancellations weren't appropriate.
"This is not in any way a means of a witch hunt," Ms. Hetherington said. "This is simply to address perhaps what is a long-time coming."
The outcome of the informal investigation may or may not influence the division's decision to grant A&R Marine a certificate to operate, Ms. Hetherington said. In that regard, Mike McElroy, legal counsel for A&R Marine, asked that the division consider extending its decision on its application from 30 to 45 days after the hearing.
On Sept. 19, A&R Marine — doing business as Prudence & Bay Islands Transport — filed an application to run a ferry from Prudence Island to Bristol.
"We would welcome the results of this investigation and would like to hear back from them in 45 days," Mr. McElroy told John Spirito, chief of the division’s legal services, who oversaw the Dec. 5 hearing.
"This is entirely improper and a backdoor attempt by the division to enter evidence that has no bearing on this application," said Timothy Dodd, legal counsel for Bruce Medley, owner of Prudence Island Ferry Inc.
"This hearing is to determine whether or not two ferries are needed, and the application submitted by A&R Marine is woefully inadequate. It all rests in the mind of Mr. Antaya (Stephen Antaya, president of A&R Marine). There's no boat, their financials are inaccurate, and we don't know if the boat they're going to get is adequate for dock services."
Sale of the Bristol dock
Terry Mercer, associate administrator at the division, later questioned whether the sale of the Bristol dock had any rate implications.
In June, the Town of Bristol bought the Prudence Island dock on Thames Street from Prudence Island Inc., for $800,000. Part of the division's investigation will determine if the ferry company had a right to sell the dock for profit, or if the funds essentially belong to ratepayers.
"Perhaps in some portion, if not all of the equity in that dock, may have been paid for and belonged to ratepayers," Mr. Mercer said.
Prudence Island Ferry Inc., hasn't had a rate increase in 20 years. The Public Utilities Commission sets the rates for all public utilities in Rhode Island. When a utility needs a rate adjustment, generally the onus is on them to ask for a rate hearing, Mr. Mercer said, regardless if it's an increase or a decrease.
"If, when the rates were initially set, they were set factoring in the purchase of that dock 20 years ago, then the rates need to be looked at to see if an adjustment was needed sooner if they're no longer collecting to pay for that dock," he said.
However, Mr. Medley explained that when he and a silent partner bought out the previous ferry service in 1986, Wentworth Institute of Technology owned the dock. He would not buy the ferry service if it did not come with the dock, he said.
"Mr. Blount arranged for us to buy the dock and we took out a 10- to 15-year note, which we paid for out of our own pockets," Mr. Medley said. "That had nothing to do with (Prudence Island Ferry Inc.), or the rates."
The sale of the dock to the Town of Bristol, he added, was to pay off that partner, who was no longer involved in the company.
Not owning the property also lowered the company's liability; the need to provide insurance on the property no longer rested with Mr. Medley.
"The town was also opening up free parking lots, so we were losing revenue," he said.
Outcomes of the informal investigation may result in Mr. Medley having to comply or make adjustments to his service, and a potential rate hearing before the commission.