SOUTH PORTLAND — Portland Harbor commissioners voted Thursday to consider fee increases for harbor pilots that are identical to those requested by a private pilot company and approved by the commission in May. The decision follows a lawsuit filed by the operator of the Portland-Nova Scotia ferry that challenges the initial approval on the grounds that the rate-setting process was flawed.
The proposed rate schedule includes a $1,200 minimum fee for guiding vessels in and out of the harbor. The commission intends to collect data to justify that fee, which is a substantial increase from 2016 rates.
Even though the proposal now under review is identical to that passed in May, the commission is not reconsidering its earlier vote, said Commission Chairman Tom Dobbins.
“It is not a re-do,” Dobbins said in a phone interview Thursday. “We are going to look at the rates and see what we think of them.”
The $1,200 minimum fee is the same amount requested by Portland Pilots Inc. in March and approved by commissioners at a meeting in May. The company says it needs the higher rates to cover its costs as Portland ship traffic declines and the harbor gets fewer large ships.
Harbor pilots are required by state and federal law to guide large ships in and out of ports. The fees are based on the size of the ship and fuel, but also include a base minimum charge.
The May rate increase has been challenged by Bay Ferries, the Canadian company that runs the CAT ferry to Yarmouth, Nova Scotia.
In a lawsuit against the commission and Portland Pilots that was filed in Cumberland County Superior Court, Bay Ferries asked for the rate change to be invalidated, alleging it was never notified of the proposed minimum rate increase – from $709 to $1,200 – and that the commission violated the law by not following the correct procedure to approve the new rate, including notifying Portland and South Portland and the Maine Department of Transportation.
The company runs daily ferries into Portland Harbor during the summer season and is one of the pilots’ biggest customers.
The $96,000 extra annual cost of the new fee would make it more difficult for the Portland-Nova Scotia ferry to operate, Bay Ferries warned in its suit.
The rate hike “to $2,400 round-trip is cost prohibitive, arbitrary, unnecessary, and creates a strong disincentive for continued operation of the ferry service,” it said in its complaint.
In a letter to the commission, Twain Braden, an attorney for Portland Pilots, said the company has struggled as ship traffic into Portland Harbor has dwindled. There are two harbor pilots for Portland, down from five 15 years ago. Even an increase in the minimum fee doesn’t fully cover the $1,300 a day it costs for a pilot boat and crew.
“With only two licensed pilots on staff, a short, busy fall season means there is no room for sickness, no room for flexibility, and a desperate need for income that allows (Portland Pilots) to cover its expenses for the remaining 10 months of the year,” Braden said.
Portland Pilots President Mark Klopp said raising minimum fees to $1,200 would bring Portland in line with other ports on the East Coast. Minimum fees in nearby ports range from $2,370 in Searsport to $750 in Portsmouth, according to the pilots.
But merely comparing ports without the context of distance, conditions and costs will not give the commissioners an accurate sense of what a reasonable fee should be in Portland, said Harold Pachios, the attorney representing Bay Ferries, at a public hearing Thursday.
As a regulator, the commission didn’t do its due diligence in May to make sure the rate increase was reasonable, including examining the pilots’ financial records and other evidence, Pachios said.
“The Portland Pilots are a monopoly, and you are the regulator tasked with ensuring their rates are ‘just and reasonable,’ ” Pachios said. “You have no basis to make a proposed rate without a lot of information.”
Commissioners still don’t have what they need to make a rate determination, Pachios said.
“You can’t make a proposal tonight about what the rate would be because you don’t have an answer to any of those questions,” he said.
Some commissioners didn’t seem sure if they were responsible for a deep examination of proposed rates.
“I don’t think the comparisons to PUC and other regulators apply to our relationship with the pilots,” said Bert Jongerden. “… If a presentation is brought to us and it looks reasonable and just, we are not charged with doing an investigation that a public utility would do.”
Dan Hanley said he trusted the pilots to submit a rate that was fair and reasonable.
“I’m comfortable with the numbers. I don’t question they are setting the wrong number,” Hanley said.
“We can ask to see their books. We’ve never done it in the past.”
The commission is tasked with setting rates, but has always approved rate requests and never before tried to propose its own rate, said Dobbins, the chairman.
The commission will hold another public hearing on the rate increase in November.
Peter McGuire can be contacted at 791-6325 or at:
pmcguire@pressherald.com
Twitter: @PeteL_McGuire
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