Tennessee Regulatory Authority overhaul passes Senate

Tennessee Regulatory Authority overhaul passes Senate

April 27th, 2012 by Andy Sher in Local - Breaking News

Republican Governor Bill Haslam is pictured in this file photo.

Photo by Associated Press/Times Free Press.

NASHVILLE - The Senate approved Gov. Bill Haslam's proposed overhaul of the on a partisan 20-13 vote.

The bill changes the current four-member full-time board into a five-member part time board. It also adds a full-time executive director.

An amendment by Sen. Andy Berke, D-Chattanooga, sought to change the TRA into a three-member board with a full-time director failed on a 12-20 vote.

Berke said the regulatory authority has an outsize impact on water and gas rates paid by tens of thousands of Hamilton Countians since the Tennessee-American Water Co. and Chattanooga Gas are regulated by the TRA. It needs full-time directors, he said.

Berke's amendment got 12 yes votes and 20 noes. Among those voting against it was Sen. Bo Watson, R-Hixson.

The House has not yet acted on the bill.

Sen. Tim Barnes, D-Clarksville, earlier spoke in favor of the amendment, citing a Baird Equity Research report issued this week which said Haslam's idea of turning the TRA from a full-time board to a part-time board poses problems in analysts' views.

"We lower our assessment of Tennessee regulation to generally constructive/declining, due to concerns regarding pending legislation, which would alter the Tennessee Regulatory Authority's (TRA) ability to adequately regulate the state's utilities," the report says.

It goes on to say "we do not believe that a part-time commission serves the best interest of utilities operating in the state or consumers. This change likely makes it difficult to attract qualified commissioners and could increase regulatory lag pressuring earned returns."

Haslam has argued his legislation would make the agency more efficient and effective. The agency has few rate cases since most telecommunications companies are deregulated.

Critics of Haslam's bill, including current TRA Chairman Kenneth Hill, say the full-time directors do far more than hear full-blown rate cases. Hill has also said the rate cases are extremely complex, involving thousands of pages of testimony, and hearings can last weeks.