Daily News Photo by SEAN McCOY Attorney Jennifer Jones, hearing examiner for the Public Services Commission rate investigation, addresses the PSC on Thursday night.

ST. THOMAS - A compromise of sorts was reached Thursday as the V.I. Public Services Commission voted to cut back on a ferry rate increase for passengers traveling between St. Thomas and St. John.

After a rate investigation for the ferry companies was completed earlier this year, the PSC voted in April to increase the current ticket prices.

The new set of rates the PSC approved at their April 1 meeting included increasing the one-way fare for adults between Red Hook and Cruz Bay by $2 - from $5 to $7. The new rates would decrease the one-way fare for adults between Charlotte Amalie and Cruz Bay by $2 - from $10 to $8.

However, the increase was almost immediately put on hold after St. John-based Virgin Islands Unity Day Group filed a petition to reconsider the rate investigation. The group questioned the financial records provided to the PSC by the ferry companies, which were the basis for the new rate structure.

In May, the PSC assigned St. Thomas attorney Jennifer Jones as hearing examiner to review the ferry companies' finances. Jones had both sides brief the issues raised by the petition and held public hearings on both St. Thomas and St. John.

She issued her final recommendation at Thursday's meeting.

"We did find that in some cases there were errors," Jones said.

She said a technical consultant, Avery Williams, reviewed the previous consultant's findings and found that the methodology used to determine net investment was done in error. The net investment is critical to determine the rate of return to which the ferry companies are entitled. By law, the two franchised ferry companies - Transportation Services of St. John and Varlack Ventures - are entitled to a 6 to 8 percent return. Under certain circumstances, the rate of return can be higher, but that is a determination made by the PSC.

Jones said the consultant also found that there were some expenses that were not necessary or justifiable, which changed the numbers.

"What that has done is knock a dollar off of the rates," Jones said.

The new rates represent various increases across the board - with the exception the child's rate, which will remain at $1 - although the hikes are not as high as those approved in April.

The new rates for a one-way fare for adults between Red Hook and Cruz Bay will jump from $5 to $6. The price for a one-way fare for adults between Charlotte Amalie and Cruz Bay will go from $10 to $12.

It was a unanimous decision by the PSC, which also directed the ferries to post notice of the change for 10 days. The new rates take effect Nov. 8.

"It's a bittersweet victory, but it is a victory," V.I. Unity Day Group President Lorelei Monsanto said.

She said the process worked, because it proved that the PSC had made a mistake in the original decision, and the petition for reconsideration allowed for some of those mistakes to be corrected.

"It shows that the public has the right to fight for solutions when they feel that their rights are being violated," she said.

The ferries also were torn about the decision.

"I'm caught between a relief of finally getting a rate increase, but with the economy, based on the numbers, at the end of the day I'm not sure how much good it's going to do," Transportation Services general manager Kenrick Augustus said.

"It puts us in a better position. However, it doesn't put us where we need to be," Varlack Ventures general manager Delrise Varlack said.

Because the rate investigation was begun two years ago, approved and then reconsidered, the increase approved Thursday is based on 2007 financial information and ridership levels. The ferry companies' technical consultant, Malcolm Kirwan, said the ridership has dropped by 20 percent in the last two years.

The ferries filed a request for emergency relief with the PSC Thursday. The request outlines the ferries' financial woes and asks for a reduction to the downtown Charlotte Amalie to Cruz Bay route and a shortened evening schedule between Red Hook and Cruz Bay.

The downtown run has been suspended for the last two weeks because of mechanical problems with the ferry boats. Augustus said the route should resume by Monday or Tuesday.

The PSC said they would take some time to consider the emergency request and make a decision at a later date.

PSC members at Thursday's meeting were Joseph Boschulte, Donald Cole, Verne David and Elsie Thomas-Trotman. Members M. Thomas Jackson and Sirri Hamad were absent.

- Contact reporter Aldeth Lewin at 774-8772 ext. 311 or e-mail alewin@dailynews.vi.