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Ferry system pushes for fuel surcharge on tickets

Washington State Ferries, citing the unpredictability of fuel prices, presented a plan to the State Transportation Commission last month that would allow the ferry system to add a fuel surcharge to each ticket if fuel prices rise enough.

The surcharge would be updated as often as once a month and would be capped at 20 percent of each ticket’s price, said Ray Deardorf, Washington State Ferries’ planning director.

But before the ferry system can charge a fuel fee, the state Transportation Commission — which has the authority to approve increases in transportation ticket fares — must recommend to the Legislature that a surcharge option be created, and the Legislature must approve the plan.

The state ferry system plans to take public comments about its proposal in February and March before the Transportation Commission discusses the plan further in March.

If the surcharge plan is approved, the ferry system will have the option to charge a fuel fee as early as May 1.

The ferry system plans to budget more generously for fuel prices, so that it would be less likely it would ever have to implement a fuel surcharge, should one be permitted, according to the presentation WSF officials made to the Transportation Commission.

The proposed fuel surcharge would lessen Washington State Ferries’ exposure to the effects of fluctuating fuel prices, thereby insulating the ferry system from unexpected spikes in fuel costs that could take a bite out of the ferry system’s overall budget, Deardorf said.

Currently, WSF budgets $1.66 per gallon of diesel fuel and spends approximately 20 percent of its overall operating costs on fuel.

The fuel surcharge “should

be very simple to calculate,” Deardorf said. “It would be tied to the base price of fuel, ... and if fuel would go above that, it would automatically trigger a fuel surcharge up to a certain point.”

WSF plans to conserve fuel by making upgrades on some ferries and running others at efficient speeds, according to the presentation, thereby again lessening the chances that a fuel surcharge will kick in.

Gov. Chris Gregoire wrote the possibility of a ferry fuel surcharge into her proposed 2010 budget, showing she too is interested in the idea.

Vashon ferry advocates, meanwhile, are keeping a close eye on the proposal.

While Alan Mendel, who chairs Vashon’s ferry advisory committee, said he’s not opposed to the idea of a fuel surcharge, he thinks the current plan may have some flaws.

“I don’t necessarily like that once they set a base price and once fuel goes above that price, customers are going to be paying 100 percent of the difference,” he said. “You could spread that out between the customers and the state, but they’re not going to.”

There are still a few details that need to be worked out, Mendel added.

What if fuel drops below the price the ferry system budgets, for example?

“Are fares going to be reduced?,” he said. “Are they going to set money aside so the next time fuel goes up, we don’t pay a surcharge? We don’t know yet.”

Mendel said he hopes the details of the surcharge idea will be ironed out and made public before the plan goes too far forward.

“I know that over the last three or four years, fuel prices rose dramatically and that was unexpected,” he said. “I can see passing some of that on to the riding public under those circumstances. The question is how much and when and what the process is.”

 

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