State Rep. Gerald McCormick, R-Chattanooga, is calling on the Tennessee Regulatory Authority to make a “prudent decision” when it comes to considering Tennessee-American Water Co.’s latest rate increase proposal.
In an Aug. 12 letter to the editorial page of the Chattanooga Times Free Press, Rep. McCormick said his office has “been flooded with calls from constituents voicing concern about Tennessee-American’s proposed 20.58 percent rate increase. As an individual ratepayer and a representative of this community, I share their concern.”
A hearing on the rate increase is scheduled to begin Monday in Chattanooga. Company officials say the increase is justified by higher prices in areas such as fuel and the need to make $21 million in new infrastructure investments.
In his letter, Rep. McCormick said the company has “earned a reputation for large, frequent rate increases” and he noted Chattanooga water rates are the highest among the state’s six largest cities.
Tennessee-American officials have suggested those figures are flawed because the company does not charge connection fees and a number of other types of charges that other utilities commonly charge.
“Rep. McCormick is a dedicated public servant who has always been a good friend to private businesses like the water company,” said John Watson, president of Tennessee-American Water. “We briefed Rep. McCormick on the rate case in March, and he has an open invitation to meet with me at his convenience if he wants another briefing on the business case that supports our request.”
In the letter, Rep. McCormick stops short of calling for a rejection of the company’s request. But an accompanying news release says he considers the company’s latest request “grossly excessive” and quotes him as saying Tennessee-American “needs to act responsibly and in the public interest. I don’t think they are doing that right now.”
The city of Chattanooga, the state’s Consumer Advocate and Protection Division and the Chattanooga Manufacturers Association have intervened in the case, questioning the economic justifications for the increase that would follow a 12.3 percent increase approved by Tennessee regulatory officials in May 2007.