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Study: Interstate faces 'significant' loss if new ferry is allowed

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Posted: Friday, September 20, 2013 11:45 am | Updated: 2:40 pm, Thu Apr 16, 2015.

NARRAGANSETT — The operators of the Block Island Ferry and a proposed competitor continue to argue via motions filed with the state Division of Public Utilities and Carriers. Interstate Navigation Co., operator of the Block Island Ferry, has requested intervenor status in the R. I. Fast Ferry application to run high-speed ferry service between Quonset and Block Island.

In Interstate’s latest motion, dated Sept. 16, attorney Michael McElroy said the company must have the opportunity to present evidence at hearings in April regarding whether or not Interstate’s service is adequate; its investments of capital; the probable effect of new competition; what effect such competition would have on Interstate’s revenues; and whether Interstate would have resources to continue serving as New Shoreham’s lifeline.

Edward M. Mazze, a member of the Narragansett Economic Development Committee and professor at the University of Rhode Island, supervised a survey of Interstate’s traffic this summer and concluded the company would suffer “significant ridership loss” if R.I. Fast Ferry were given permission to run a competing service, according to the filing.

McElroy contrasted Interstate’s year-round service to Block Island with R.I. Fast Ferry owner Charlie Donadio Jr.’s proposal, which would carry only passengers, not freight, and would operate only in the summer.

“[R.I. Fast Ferry] is not proposing to do any of the heavy lifting required during the other eight months of the year when there is no profit to be made,” McElroy wrote. “[R.I. Fast Ferry] will not be bringing any passengers, freight, cars, trucks, gasoline, diesel, propane, food, etc. to Block Island in the winter. . .but will instead be siphoning off Interstate’s summer round-trip tourists and putting those profits directly into the pockets of [Donadio.]”

Interstate reinvests all of its authorized profit into the services it provides Block Island, McElroy wrote.

R.I. Fast Ferry’s attorney James A. Hall called Interstate’s response “unauthorized” in a filing with the Division dated Sept. 17. Interstate was merely repeating arguments made in early correspondences to the Division, but the company still does not meet the qualifications to be granted intervenor status, wrote Hall.

In the filing, McElroy confirmed Interstate would start docking its fast-ferry, M/V Islander, in Fall River – rather than Galilee – overnight in the summer of 2014, but he downplayed the economic gains from this change. The ferry will leave Fall River early each morning and travel to Newport. Throughout the day, the Islander will provide round-trip service from Perrotti Park in Newport to Block Island and after its last scheduled run of the day, the ferry will return to Fall River for the night.

“This is far from the picture [R.I. Fast Ferry] attempts to paint of this service being a major extension of Interstate’s service,” McElroy said. “But nevertheless, if the Fall River service provides Interstate with additional income, every single dollar of those revenues will go to support the lifeline service.”

Kevin Mulholland, chairman of the Board of Directors for the Narragansett Chamber of Commerce, said that chamber’s board has voted to rescind its letter of opposition to the expansion of R.I. Fast Ferry service, and a letter stating such was sent to the state. The Division has no record of it, according to Spokesman Tom Kogut.

Mulholland said the board has not met since Interstate’s announcement that it will dock the Islander ferry in Fall River, but said, “I don’t think we have a right to bring up something that’s going to happen out of the state of Rhode Island. [Donadio] wants it to look like we’re protecting Interstate Navigation, but we weren’t. We’re concerned about all the businesses in Narragansett and South Kingstown where people, who get off the ferry or are on their way down to the ferry, go.”

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