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In re A&R Marine Corp.

Supreme Court of Rhode Island

January 16, 2019

In re: A&R Marine Corp. d/b/a Prudence & Bay Islands Transport Initial Rate Filing.

          Rhode Island Public Utilities Commission No. 4586 Associate Justice William P. Robinson III

          For Petitioner: Michael R. McElroy, Esq. Leah J. Donaldson, Esq. Attorney(s) on Appeal

          For Respondent: Christy Hetherington, Esq. Terence J. Tierney, Esq. Kevin P. Gavin, Esq.

          Present: Suttell, C.J., Goldberg, Flaherty, Robinson, and Indeglia, JJ.

          OPINION

          ROBINSON JUSTICE

         The Town of Portsmouth (the Town) petitioned this Court for issuance of a writ of certiorari, seeking review of a June 2, 2017 Report and Order of the Rhode Island Public Utilities Commission (the PUC). On June 16, 2017, this Court issued the requested writ of certiorari. The Town contends before this Court that the PUC erred in denying its request for a discounted rate for ferry service from the Town of Bristol to Prudence Island[1] for "municipal vehicles and passengers performing essential government services;" it posits that the PUC's "express statutory authority and implied powers grant it * * * the right to order such rates without needing the permission of the entity it regulates."

         This case came before the Supreme Court pursuant to an order directing the parties to appear and show cause why the issues raised in this appeal should not be summarily decided. After a close review of the record and careful consideration of the parties' arguments (both written and oral), we are satisfied that cause has not been shown and that this case may be decided at this time.

         For the reasons set forth in this opinion, we affirm the Report and Order of the Public Utilities Commission.

         I

         Facts and Travel

         The facts in this case are not in dispute, and we are concerned solely with construing G.L. 1956 § 39-2-5(2), [2] which constitutes a pure question of law. In relating the pertinent facts, we rely primarily upon the June 2, 2017 Report and Order of the PUC at issue in this case as well as other documents contained in the record before us.

         A&R Marine Corp., d/b/a Prudence & Bay Islands Transport (A&R Marine), runs the ferry service that operates between the Town of Bristol and Prudence Island, which is in the Town of Portsmouth. On November 6, 2015, A&R Marine filed with the PUC a request to increase its revenues by 96.5 percent. That request was A&R Marine's first request for a rate change since taking over the ferry service to Prudence Island in September of 2014. On December 11, 2015, the Town filed a motion to intervene, which was not opposed and became effective on December 21, 2015. Before the PUC, the Town requested discounted ferry rates for municipal vehicles and passengers performing essential governmental services. On March 2, 2016, the Town filed testimony from Richard Rainer, the Town Administrator, in which he stated that the Town was "requesting a discount for municipal employees and vehicles using the ferry for essential governmental services that would maintain the rates currently charged to the Town for such passengers and vehicles" in order to "ensure that such municipal services continue to benefit island residents and businesses."

         A&R Marine moved to dismiss the Town's request for a discounted rate, and the Town objected. After two public comment sessions concerning the rate changes proposed by A&R Marine, an evidentiary hearing was conducted on May 10, 2016. The PUC began that hearing by entertaining oral argument on A&R Marine's motion to dismiss the Town's request for a discounted ferry rate.

         In that oral argument, A&R Marine relied upon § 39-2-5(2) in contending that "because A&R [Marine] ha[d] not proposed any discounted rates for the town, and because the Division ha[d] not approved any discounted rates for the town, * * * the [PUC could not], as a matter of law, consider the town's request for such a discount * * *."[3] For its part, the Town contended that the PUC was endowed with "the power and authority to supervise, regulate and make orders governing the conduct of companies offering intrastate transportation services to the public" and, as such, was authorized to consider the Town's request for a discounted rate. (Internal quotation marks omitted.)

         The Division of Public Utilities and Carriers (the Division) then stated at the hearing that it had not "contemplated or included in its case for the hearing" the issue of a rate discount for the Town and it was "not prepared to speak * * * to whether it's just and reasonable or in the interest of the public." The Division acknowledged that a discounted rate for the Town had "continuously been * * * referenced" but had not been "incorporated * * * into [the Division's] analysis." The Division added that A&R Marine had never proposed the granting of a discounted rate for the Town. Subsequently, one PUC commissioner opined that the statute at issue, § 39-2-5(2), did not give the PUC the "authority to grant the [T]own's request for a discounted rate" because A&R Marine had not proposed a discounted rate for the Town, and no approval had been given by the Division. A second commissioner agreed. The PUC chairperson moved that the Town's request for a discounted rate be denied. The motion was seconded and unanimously agreed to by the commissioners.

         In the course of their arguments before the PUC, and in their filings before this Court, the parties make reference to a Report and Order issued by the PUC on July 16, 1993 in Docket No. 2090, In re: Prudence Ferry, Incorporated, Application to Change Rate Schedules (the 1993 Order). In that case, the entity called "Prudence Ferry, Incorporated" (PFI) had filed an application with the PUC to increase the rate which it was charging for ferry service linking the Town of Bristol with Hog Island and Prudence Island. PFI had provided said ferry service immediately before A&R Marine had begun providing such service. The pertinent portion of the 1993 Order states as follows:

"The town of Portsmouth has requested that the [PUC] require PFI to charge a discounted rate for * * * town of ...

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