Agenda Date: September 13, 2000
Item Number: 

Docket: TS-001064
Company Name: Horluck Transportation Company, Inc.  BC-19

Staff: Danny P. Kermode, Revenue Requirements Specialist
 Penny Hansen, Public Involvement Coordinator

Recommendation:

Dismiss Complaint and Order Suspending the tariff revisions in Docket 
TS-001064, allow Tariff No. 28 in Docket TS-001064 to become effective 
September 14, 2000, and affirm through Order the attached Settlement Agreement.

Discussion:

On July 10, 2000, Horluck Transportation Company, Inc., (Horluck) filed tariff 
revisions in which it proposes increasing rates for foot ferry service.  
Horluck proposed to increase fares by 50 cents (33% increase) from $1.50 
one-way to $2.00 one-way.  On August 9, 2000, the Commission issued a Complaint 
and Order suspending the tariff revisions.

The foot ferry provides an important commuting link between Port Orchard, 
Annapolis, and Bremerton.  The ferry is also a vital component of the Kitsap 
Transit system.  Bus passengers can transfer from a bus to the ferry, and once 
again, to an awaiting bus on the opposite side.  Kitsap Transit currently 
provides approximately 70% of Horluck’s operating revenues  The amount paid by 
Kitsap Transit is set by a Ridership Fare Agreement (RFA) between Horluck and 
Kitsap Transit and is outside the jurisdiction of the Commission.  Horluck and 
Kitsap Transit have agreed on the terms of a new Ridership Fare Agreement.  
Horluck received its last rate adjustment on March 1, 1999.  

Horluck stated it is requesting the fare increase to compensate for the effects 
of Initiative 695. The passage of I-695 has forced Kitsap Transit to cut its 
hours of service and increase bus fares. Annualizing the first seven months of 
this year, Staff has estimated that Horluck Transportation will transport 
approximately 280,000 passengers for the year 2000, compared to 450,000 
passengers in 1999, a 38% decrease.

The commission received 25 letters opposed to the rate increase.  Customers 
stated that since the purchase of the company, fares have increased and service 
has decreased.  Customers are concerned about the unreliable service provided, 
i.e., they use the service to commute one way and then it was canceled without 
notice.  Customers believe if the company cared about customer service it would 
not shut down the commuter ferry to support his charter service.  

Staff has completed its analysis and has determined that the fares as proposed 
by the company are fair, just, reasonable, and sufficient.  The increased fare 
is driven by the severe drop in passengers and increased depreciation and 
repair costs.  

As part of this filing, Horluck and Staff have agreed to conditions by which 
the tariff filing in this docket, previously suspended by the Commission, would 
become effective.  The Company has agreed to certain performance standards, 
reporting requirements, and future minimum filing requirements related to 
rates.  This settlement does not address nor resolve issues that may be 
identified in the Staff’s ongoing investigation in Docket TS-001200.  The 
Settlement Agreement has been incorporated in the order before you.

Therefore Staff recommends that the Commission dismiss the Complaint and Order 
Suspending the tariff revisions in Docket TS-001064, allow Tariff No. 28 in 
Docket TS-001064 to become effective September 14, 2000, and affirm through 
Order the attached Settlement Agreement.