Agenda Date:          August 9, 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: 
Issue a Complaint and Order Suspending the Tariff Revisions filed by Horluck 
Transportation Company, Inc. in Docket TS-001064.
Discussion: 
On July 10, 2000, Horluck Transportation Company, Inc., (Horluck) filed tariff 
revisions in which it proposes increasing rates for foot ferry service. 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 pays 
approximately 70% of Horluck's operating revenues. Annualizing the first seven 
months of this year, Staff has estimated that Horluck Transportation will 
transport approximately 280,000 passengers for the year 2000, this is in 
contrast to 450,000 passengers in 1999 . It received its last rate adjustment 
on March 1, 1999. Horluck has proposed to increase fares by 50 cents (33% 
increase) to $2.00 one way.
Horluck stated it is requesting the fare increase to compensate for the effects 
of Proposition 695. The passage of the referendum has forced Kitsap Transit to 
cut its hours of service and increase bus fares. The fallout has been a 37% 
decrease in ferry passengers.
The commission received 18 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., use the service to commute one way and then it's canceled without notice. 
Customers believe if the company cares about customer service it would not shut 
down the commuter ferry to support his charter service. 
Staff currently has a separate investigation open to assess the company's 
compliance to Commission rules and its business practices such as those cited 
above. The investigation is expected to be completed within two weeks. 
In this docket, Staff has prepared a test year based on 2000, however the 
elasticity effect of higher bus fares, and recent ferry service shut downs due 
to boat failures has presented a number of analytical problems. Staff believes 
these major changes require further development of, what is in all intents and 
purposes, a projected test year.
Staff is currently preparing a detailed analysis that addresses the above 
issues so that a meaningful recommendation can be prepared. Staff expects the 
analysis to be completed by the August 30, 2000 open meeting.
Therefore, Staff recommends that the Commission Issue a Complaint and Order 
suspending the tariff revisions filed by Horluck Transportation Company, Inc. 
in Docket TS-001064.