PSC to hear ferries' bids for higher fares
Published: February 14, 2013
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ST. THOMAS - Virgin Islanders soon will get a chance to speak their minds about whether they should pay more to travel between St. Thomas and St. John.
Ferry companies Transportation Services of St. John and Varlack Ventures have petitioned the V.I. Public Services Commission for a fare increase "to meet expenses and obligations," according to a statement the PSC issued Wednesday.
The Public Services Commission will conduct hearings to solicit public comment about the petitions:
- At 6 p.m. Feb. 27 at Julius Sprauve School in Cruz Bay, St. John.
- At 6 p.m. Feb. 28 at the Public Services Commission office in Barbel Plaza on St. Thomas.
The rate increase process began last May, when the Public Services Commission chose a hearing examiner to consider the petitions.
At that time, a technical consultant for the commission said that Transportation Services and Varlack Ventures share a ferry franchise agreement to provide public transportation between St. Thomas and St. John, but they are two different companies.
The franchise holders are legally entitled to a rate of return between 6 percent and 8 percent.
The consultant said he found that the current fares were not enough for Transportation Services to earn an adequate rate of return, even with a government subsidy.
Varlack Ventures did make a rate of return that fell within the 6 percent to 8 percent range but only with a government subsidy, the consultant found. Based on rates alone, Varlack would not have earned the mandated rate of return, the consultant said.
The consultant recommended that the commission determine, based on projected costs and revenues, what level of subsidy each ferry company would need to meet the required rate of return.
As an alternative, he recommended a rate increase to accomplish the same goal, but he recommended against granting a subsidy and a rate increase together.
A consultant for the ferry companies said the current ferry rates, set in 2010, were meant to bring in an 8 percent rate of return, and neither company was making that level of profit.
For more information about the public hearings or the rate increase, contact Tisean Hendricks at 776-1291 or thendricks@psc.gov.vi.
- Contact reporter Lou Mattei at 714-9124 or email lmattei@dailynews.vi.
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