The Public Services Commission voted Tuesday to slash the revenue requirement for Red Hook-Cruz Bay ferry service by 21 percent, from $7.3 million to $5.8 million annually, but stopped short of setting new passenger rates, saying commissioners need more time to review the hearing examiner's full report.
The move follows a year-long review by hearing examiner Jed JohnHope of a rate increase petition filed by the two St. Thomas-St. John ferry operators, Varlack Ventures and Transportation Services. In his June report, JohnHope recommended the reduction and flagged what he said was $7 million in unwarranted earnings the companies have collected since government-owned vessels entered service in 2014.
The ferry companies' attorney, Maria Hodge, objected to JohnHope's analysis on Tuesday, arguing he failed to justify his conclusions and dismissed technical evidence from the companies' consultant, Avery Williams. The PSC voted to dismiss or defer those objections.
Among other approved measures, the commission ordered the ferry operators to establish an independent third-party ticketing system subject to PSC oversight and audits. Commissioner Raymond Williams noted the PSC had previously ordered this step, but the companies had not complied.
The commission also rejected a request to extend a 66-cent emergency fuel surcharge that has been in place for 120 days. PSC Chairman David Hughes said he would consider a new fuel surcharge only after the rate base is finalized, which he hoped would happen within a month.
JohnHope recommended a three-year test period under the new rates to allow the PSC to collect data and assess whether further adjustments are needed. The commission deferred action on the remainder of his report to a future meeting.
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