Tennessee-American Water seeks highest rate hike in history

PDF: Tennessee American's filing

Tennessee-American Water Co. filed a motion this afternoon with state regulators to raise residential water bills an average of $3.65 per month, a 20.58 percent increase.

“The filing is based on what our needs are,” said John Watson, president of Tennessee-American. “Based on the evidence and public input, a decision will be made” within 180 days.

The water company filed its request this afternoon with the Tennessee Regulatory Authority. Tennessee-American wants to increase rates to raise an additional $21.4 million to pay for infrastructure improvements, Mr. Watson said. That would be the largest increase in the company’s 138-year history.

“I’m very disappointed they’re asking for such a large increase after receiving the 12.3 percent increase,” Chattanooga Mayor Ron Littlefield said. “We contested that one. I’m confident we’ll contest this request as well.”

Mr. Watson said that Tennessee-American isn’t the only utility facing rising costs for materials, including fuel.

“There have been a lot of utility rate increases in the community,” said Tennessee-American President John Watson. “That says there are costs being incurred by utilities.”

EPB and other regional power providers in April will begin passing through a 9 percent rate increase by the Tennessee Valley Authority, said EPB President Harold DePriest. The increase includes a 6 percent increase in the base rate that TVA charges utilities, he said, and 3 percent more for higher fuel costs. EPB and other utilities are simply passing through the increased rate, and are not gaining additional revenue, he said.

Typically, the Tennessee Regulatory Authority, which oversees utilities, approves a lower amount than the water company requests. The last increase was May 2007, 12.3 percent, the highest single increase up to this time. The utility had asked for a 19.7 percent hike at the time.

The proposed rate hike would provide $8.8 million for improvements to the company’s Citico treatment facility on Riverfront Parkway, including replacing a 92-year-old sedimentation basin. The hike also would allocate $6.6 million for maintenance on water mains and hydrants, as well as installing electronic water meters.

For complete coverage, see tomorrow’s Chattanooga Times Free Press.