2011-05-14 / Top News

MPSC Suspends Public Hearings on Ferries

By Karen Gould

The Michigan Public Service Commission (MPSC) has suspended its public hearings regarding Mackinac Island ferry operations until further notice. Commissioners, meeting Tuesday afternoon, May 10, in Lansing, remanded the issue to Administrative Law Judge Dennis

Mack.

The public hearings had been scheduled for Mackinac Island Monday, May 16, and in St. Ignace and Mackinaw City Tuesday,

May 17.

The MPSC move followed a filing from the City of Mackinac Island Monday, May 9, asking that the case be dismissed for mootness. The city’s filing noted that all of the boat companies were granted franchises for two years based on the same terms and conditions. Commissioners asked Judge Mack to set a deadline for filing responses to the May 9 filing.

If no filing is made in opposition to the city’s motion, the case would be dismissed. If it is opposed, then Judge Mack would decide if the case be dismissed or move forward with proceedings. If the case moves forward, he would set a new schedule. The commission also directed Judge Mack to make a decision if the case should be dismissed.

In a prepared statement, Chris Shepler, vice president of Shepler’s, said the company is not likely to oppose the city’s motion at this time, but reserves the right to turn to the MPSC for help again in the future, if needed. He credited the MPSC’s action with helping to assure equal treatment for all companies.

“…the key was the MPSC asserting jurisdiction over Mackinac Island ferry service,” he said. “Only then did the city become responsive to our concerns. We appreciate the commission’s continuing leadership in ensuring that competition thrives in the Mackinac Island ferry industry. We reserve the right to pursue the issue with the MPSC again, should that prove necessary.”

In November 2010, the Mackinac

Island City council agreed that any company seeking a ferry franchise would receive a twoyear agreement on the same terms and conditions. In March, two companies, Shepler’s Mackinac Island Ferry and Northern Ferry Company, a combined operation of Arnold Transit and Star Line, were issued franchise agreements.

In February, Shepler filed a complaint with the MPSC. The company asked the commission to freeze ferry ticket prices to 2010 rates, which included $24 for an adult round trip ticket. Shepler also asked the MPSC to prohibit the other companies from charging less money.

The city had begun examining ferry franchise issue in October 2009. Then, the city said it was concerned with the rising cost of ferry tickets and a lack of price competition with the three companies charging the same prices. Only one company, Arnold, offered ice-to-ice service, the city noted, and during peak season, to the inconvenience of Mackinac Island residents and businesses, there was no late night boat service.

The city asserted more control over these aspects when council adopted its ferryboat ordinance in March. The ordinance required that each company submit a ticket price schedule. All ferry companies were required to run ice-toice. The city established a minimum number of boat trips per day and set the time of the first and last boats. It limited free travel on the boat lines.

In addition, the city increased its franchise fee from 2% to 7% to Shepler’s and Northern Ferry.

This year, the city hopes to earn $500,000 from franchise fees, compared to $300,000 last year, although it could earn as much as $1 million.

“The city only has 520 yeararound residents and yet those 520 people had to provide services and infrastructure sufficient enough to handle 700,000 to 900,000 visitors a year,” city attorney Michael Cavanaugh told the Town Crier Tuesday, May 10. “On some days as many as 20,000 visit the Island and that requires a significant police force, fire department, water, sewer, street cleaning, public restrooms, and other facilities. The franchise fee will allow the city to continue to provide all of those services.”

Franchise documents, and documents issued by the MPSC, can be read free on the Mackinac Island Town Crier Web site, www.mackinacislandnews.com, under the tab “Ferry Franchise Documents” on the left side of the opening page.

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