Tennessee-American Water Co. must get its proposed 20 percent rate increase approved by the Tennessee Regulatory Authority.
But state regulators have no say in the Hamilton County Water and Wastewater Treatment Authority’s plan to charge 24,000 customers an extra $8 monthly fee.
What’s the difference?
That question has been on the minds of some Hamilton County commissioners since the wastewater authority voted May 7 to approve the fee increase.
“Why can you meddle in one of them and not meddle in another one?” Commissioner Fred Skillern asked jokingly.
The difference comes down to utility ownership, said Phil West, a spokesman for the Tennessee Regulatory Authority.
“The history behind (the regulatory authority) is to regulate the profits of investor-owned utilities,” he said. “Publicly owned utilities, they’re not supposed to make profits.”
County officials have been unhappy with the rate increase proposed by Tennessee-American, a for-profit, privately owned utility, and the wastewater authority, a nonprofit county agency.
From 1955 to 1996, the state regulatory authority was the Tennessee Public Service Commission, according to the Tennessee Historical Society. Since its founding in 1897, the agency also has been called the Railroad Commission and the Railroad and Public Utilities Commission.
The original Railroad Commission was formed to oversee the rates of railroad companies to prevent price gouging. In 1919, the commission was given broader authority over other utilities, including powers to approve franchises and regulate practices, according to the Historical Society.
Since its inception, the commission has had jurisdiction over what the law calls “public utilities,” but that doesn’t include government-owned agencies or nonprofit organizations.
The County Commission voted June 18 to spend up to $65,000 to fight Tennessee-American’s proposed rate increase. After the wastewater authority announced its proposed $8 fee to pay for inspection and repair to sewer lines, Mr. Skillern asked the authority for quarterly financial reports, which the authority doesn’t usually provide.
The authority is only required to provide the commission with annual reports.
Several commissioners said they do not feel they were properly notified of the authority’s fee plan before it was announced publicly.
“Here we have an authority that can raise rates without any answering to the voters or anything else,” Commissioner John Allen Brooks said.
The county mayor does have the authority to appoint members to the authority’s board, which the commission must approve. The commission can also remove board members, but has never done so, according to Commissioner Curtis Adams.
Commissioner Richard Casavant has defended the authority, noting that the commission similarly doesn’t get word when Erlanger hospital, which is publicly funded, raises room rates.
The authority’s fee is part of a plan required by the Tennessee Department of Environment and Conservation to inspect and repair lines that connect homes to main sewer lines, authority officials have said. Tennessee-American’s rate increase is needed for system improvements and upkeep, according to company President John Watson.
The Tennessee Regulatory Authority is expected to make its decision about the water company’s rate increase sometime in September.