Chattanooga: Group makes waves over water rate hike

A coalition of local government and business leaders brought their fight against a proposed rate increase by Tennessee-American Water Co. to the utility’s source on Tuesday.

Standing on the north shore of the Tennessee River that supplies Chattanooga’s water, Mayor Ron Littlefield described the utility’s request to raise water rates for the second year in a row as “excessive.” For consumers already struggling with higher energy costs, the increase is “something we cannot accept,” he said.

Chattanooga and Hamilton County governments are joining with members of the Chattanooga Manufacturers Association and other citizens in a new group called “Fight the Hike.”

Tennessee-American was granted a 12.3 percent increase last year, and the company is asking the Tennessee Regulatory Authority to boost rates another 20.58 percent this year.

The Tennessee Regulatory Authority is scheduled to decide in September how much, if any, of a rate increase to allow Tennessee-American to implement in October.

John Watson, general manager for Tennessee-American, said the higher rates are needed to keep pace with soaring energy and chemical costs to pump and treat water from the river.

Even if the Tennessee Regulatory Authority approves all of the request, “water will still be the cheapest utility” with monthly costs under $20 for most Chattanooga households, Mr. Watson said.

“This rate increase would cost the average customer only 12 cents a day,” he said. “That’s far less than the increases we have seen in other utilities in recent years.”

But utility critics said such comparisons are unfair, since the basic commodity sold by Tennessee-American is derived for free from the Tennessee River. Chattanooga businessman Randy Baker, a North Chattanooga resident who is heading the new “Fight the Hike” coalition — whose motto is “Fight the hike because it’s our water” — said he cannot understand the justification for a combined 35.1 percent of rate increases in just over a year.

“How can Tennessee-American justify an increase of this magnitude when the average family is struggling to scrape together money to keep gas in their car, food on their table and mortgage payments current?” Mr. Baker asked.

Since the start of last year, the average price of gasoline, natural gas, electricity and water all have risen by double-digit amounts in Chattanooga, or more than double the average increase in worker’s paychecks during the past year and a half, according to utility and government figures.

Ray Childers, president of the Chattanooga Manufacturers Association, also complained about the frequency and complexity of water company rate requests in recent years. Since filing its latest rate request in March, Tennessee-American has filed more than 60,000 pages of legal documents with the Tennessee Regulatory Authority in Nashville.

The utility also has asked for financial information about manufacturers who are objecting to the water rate increase and details of how the city and Eastside Utility District negotiated water rates for the upcoming new Volkswagen plant, Mr. Childers said.

“Their strategy seems to be to flood us with repeated rate requests,” he said. “Even when they only get some of what they ask, they still end up with more money.”

Mr. Watson said Tennessee-American must justify all of its expenses and costs with state regulators and their accountants.

“This is a very open and transparent process that other businesses don’t have to go through,” Mr. Watson said.