NASHVILLE — A state regulator is aiming a hose at Tennessee-American Water Co.’s request for a 21.7 percent increase in Chattanoogans’ water rates, arguing the water company deserves only a fifth of the $7.64 million increase it is seeking.
Tennessee Regulatory Authority Director Eddie Roberson’s proposal on how to handle the rate case came in the form of an eight-page motion to two fellow regulatory authority directors who serve with him on the three-person panel hearing the matter.
Mr. Roberson, who is chairman of the rate petition hearing, said the water company should only be allowed to increase existing rates by $1.6 million.
Regulatory authority directors will begin deliberating Monday on the motion, made public on the authority’s Web site Friday, said spokeswoman Jessica Johnson. The motion could be amended or passed as is. Action requires approval by two of the three members, she said.
John Watson, Tennessee-American Water Co. president, said company officials “are very disappointed with the motion made by Chairman Roberson.”
“The proposed motion is inconsistent with past positions taken by the TRA (Tennessee Regulatory Authority) and, if adopted, we do not believe the decision is in the long-term best interest of our customers or the water system,” Mr. Watson said.
Mr. Roberson’s motion calls for allowing Tennessee-American to impose only a 4.37 percent rate increase on its residential, industrial and commercial customers in Chattanooga, Fort Oglethorpe and Catoosa County in Georgia.
But the motion would require a 12.77 percent rate increase for Signal Mountain and Walden’s Ridge customers.
Tennessee-American, which supplies water wholesale to Signal Mountain, Walden’s Ridge, Catoosa and Fort Oglethorpe, Ga., under contract, had not sought any increase at all in those communities.
Mr. Roberson’s motion goes against arguments or requests by Tennessee-American on a number of key points, ranging from how much money the company can earn now under existing rates to how much profit it should be able to generate for its corporate parent, investor-owned American Water Works Co.
Tennessee-American’s request for a rate increase, which follows a 12.3 percent hike approved by a different Tennessee Regulatory Authority panel last year, has been opposed by the Tennessee Attorney General’s Consumer Advocate and Protection Division as well as the city of Chattanooga and the Chattanooga Manufacturers Association.
Mr. Roberson’s motion seeks to slash the $1.6 million Tennessee-American wants to charge ratepayers for its costs of hiring lawyers and experts to push this year’s increase, as well as its costs for battling the state, city and manufacturers in last year’s rate request. Mr. Roberson wants to cut the figure to about $580,000.
Ryan McGehee, an assistant state attorney general, said Friday that officials were still reviewing Mr. Roberson’s motion.
“We look forward to the hearing on Monday and the TRA’s deliberation of the proof presented by the Consumer Advocate which requested a rate reduction for TAWC (water company) ratepayers of around $1.5 million.”
He declined further comment, and Chattanooga attorney Rick Hitchcock, who is on the city’s legal team, said he had no comment.
Chattanooga Manufacturers Association President Ray Childers said he would prefer the cut in existing rates sought by the consumer advocate, but Mr. Roberson’s motion doesn’t look all that bad to him.
“Even though I’d like to have seen it lower or no increase at all — I’d have to say that given the testimony and circumstances I think it (Mr. Roberson’s motion) would be a fair and reasonable result.”
Andy Sher is a Nashville-based staff writer covering Tennessee state government and politics for the Times Free Press. A Washington correspondent from 1999-2005 for the Times Free Press, Andy previously headed up state Capitol coverage for The Chattanooga Times, worked as a state Capitol reporter for The Nashville Banner and was a contributor to The Tennessee Journal, among other publications. Andy worked for 17 years at The Chattanooga Times covering police, health care, county government, ...