The battle over a contaminated Tiverton neighborhood and the cost of cleaning it up moved to the Rhode Island State House last night, where it was revealed that the tab for a Washington, D.C., law firm representing the state has risen to $777,000 — and climbing.

A Senate Finance Committee hearing into the legal spending, prompted by a Providence Journal story last week, attracted a cast of characters that have grown familiar with one another over the course of a five-year legal struggle over contaminated soil in North Tiverton’s Bay Street neighborhood.

Some of the 250 residents of the neighborhood pleaded with senators to pass legislation that would increase the fines on polluters from $1,000 to $50,000 a day — legislation that they hope would pressure the Southern Union Co. to settle a legal battle with state environmental regulators.

“How do you defeat a bully?” asked Gail Corvello, leader of a neighborhood group. “You stand up to him and let him know that you won’t back down. Please keep all Rhode Islanders safe by sending a strong message.”

The Rhode Island Department of Environmental has traced the contamination to the former Fall River Gas Co., which allegedly dumped waste material in the area in the early 1900s. The company later became part of New England Gas, which was in turn purchased by Southern Union, a big utility company based in Houston, Texas.

While residents are suing Southern Union, which denies responsibility, the DEM is pursuing an enforcement action. Saying that the state lacks the resources to combat a corporation with three big law firms at its disposal, DEM officials testified last night that they hired Sutherland Asbill & Brennan, of Washington, last fall to help.

The Journal reported last week that the firm has billed the DEM $448,000 through February, with some lawyers charging more than $500 an hour, and one $680.

In response, legislative leaders delayed voting on legislation to increase the fines on polluters, and enable the state to recover legal costs, and instead scheduled last night’s hearing.

Reviewing information provided by the DEM — but information that the DEM would not provide The Journal when asked — Senate Finance Chairman Stephen D. Alves, D-West Warwick, revealed that Sutherland Asbill’s invoices through April total $777,000.

Senators also discussed a new request for legal services, submitted by DEM Director W. Michael Sullivan on May 18, seeking another $1.5 million, which has not yet been approved by the Department of Administration. That apparently supersedes a proposed DEM request for another $3.5 million, obtained by The Journal, based on costs already incurred plus a projected budget going forward of up to $2.7 million.

That means that Sutherland Asbill, which billed $355,000 in January and February, as previously reported, billed the state another $322,000 for March and April. Noting that the state has yet to receive the firm’s bills for May and June, Alves noted that the bills have been piling up at the rate of $200,000 a month and have likely already reached the $1 million range — with no clear end in sight.

“What happens if we lose this case, and the bills keep on growing, and now we owe five, six, seven million?” asked Alves. “Where do we get the money from?”

Because the DEM has only received authorization to spend $60,000, the state has only paid Sutherland Asbill $35,000, money drawn from the agency’s Emergency Response Fund, which was created to help clean up oil spills.

Asked how much money was available in the fund to pay additional bills, DEM officials estimated only about $75,000.

Furthermore, Alves released a letter last night from Attorney General Patrick C. Lynch to Governor Carcieri last Monday, the day of The Journal story, in which Lynch said the use of money from the fund “is deeply troubling and may be illegal.”

Sullivan blamed Southern Union for dragging out the case and waging a costly war designed to wear the state down and deny justice to the people of Tiverton. He also distributed a list of more than 100 other industrial sites throughout Rhode Island with potential contamination.

“It’s about time that DEM and the state stepped up to the plate,” said Sullivan. “We have tried to comply with every rule and regulation (regarding purchasing). Has paperwork lagged? Yes . . . But this is about thousands of Rhode Islanders. I ask you to stay focused on them.”

Patty Allison Fairweather, the DEM’s executive counsel, was grilled by committee members and staffers about her failure to follow purchasing rules and in not seeking to hire cheaper lawyers closer to home. But she defended her choice, saying that all major Rhode Island firms had conflicts, and that she also reviewed more than a dozen Boston firms.

Lewis Wiener, a Sutherland Asbill partner who has worked heavily on the case, attributed the high costs to the “scorched earth” legal strategy of delay by Southern Union and noted that one of its lawyers, Gerald Petros, who testified against the bill, was sitting in the back of the room.

Wiener said that the firm has discounted its rates to the state, citing a DEM billing analysis showing that while the firm had billed $736,000 for hours worked through April, the actual value was $901,000. He testified to an example cited in The Journal story, in which he had billed eight hours on Feb. 14. In fact, he said, he had actually worked from 11 a.m. until 4 a.m. the following day, enduring an 11-hour train ride from Washington to Providence after an ice storm canceled his flight, so he could make a crucial deposition.

Wiener also blamed Southern Union, saying that if the company did the right thing and settled the case, “the spigot would be turned off tomorrow.”

After the hearing, Alves said he expects some version of the bill to increase the fines for polluters will be approved.

mstanton@projo.com