Deron Allen named new president of Tennessee American WaterTennessee American Water has backed off its plans to implement a 28 percent water rate increase before state regulators rule on the request.
The Chattanooga water company, which had threatened to implement its proposed rate hike last week, agreed to hold off until April 5 and to limit its legal filing costs to try to expedite a decision from state regulators on its request.
On Tuesday, Tennessee Regulatory Authority Chairman Mary Freeman said the three-member panel now should decide April 4 how much, if any, the utility may raise water rates for its 75,000 customers in the area.
In the meantime, Tennessee American Water announced Tuesday it will replace its leader in Chattanooga.
John Watson, who has headed the Chattanooga water utility for the past seven years, will retire May 1 after more than 30 years with Tennessee American and its affiliate companies. Watson will be succeeded by Deron Allen, vice president of operations for Indiana Water Works in Richmond, Ind.
The leadership change comes in the wake of company filings that suggest without a rate increase the utility will lose money on its Chattanooga operations this year.
In a prepared statement, Watson urged regulators to help the utility offset higher energy, labor and chemical expenses since water rates last were raised in October 2008.
"Tennessee American Water filed this increase in rates to recover the cost of providing our customers with the high-quality, reliable service they are accustom to receiving," Watson said.
In its initial filing, the utility asked for a 28 percent increase in water rates to capture another $9.9 million a year. Subsequent increases in costs raised the company's request to more than $10 million, or 30.5 percent above current rates.
The water company had also had sought more than $1.2 million for the costs of processing its rate filing, but the company agreed to cut that request in half.
The city of Chattanooga, the Chattanooga Regional Manufacturers Association and the state's Consumer Advocate are opposing the rate increase.
WHAT'S NEXT?
The Tennessee Regulatory Authority panel considering the water rate request will meet on April 4th in Nashville to issue its decision. Any rate increase could be implemented thereafter.