Tennessee American Water poised for largest-ever rate increase

Tennessee American Water poised for largest-ever rate increase

June 1st, 2012 by Ellis Smith in Local Regional News

The Tennessee American Water Company facility in Chattanooga is shown in this aerial file photograph.

Photo by John Rawlston/Times Free Press.

Tennessee American Water has filed to raise Chattanooga-area water rates by 23 percent - the largest hike in history.

Its proposal would hike rates by $5.94, or about 20 cents per day, to an average bill of about $25.15 if approved by the Tennessee Regulatory Authority.

The state-regulated utility previously raised rates 14.76 percent in 2011, which until that point was also the largest-ever rate increase for Chattanooga-area residents. That increase hiked the average Chattanoogan's bill about $2.45 per month to $19.07.

The newest infusion of cash would go to repair local water infrastructure such as water treatment facilities, pumps and pipelines worth about $25 million, said Deron Allen, president of Tennessee American Water.

"Our rates reflect the true cost of providing water service to our customers. This includes significant investment in local infrastructure to enhance and maintain our systems to ensure the quality and reliability of our service," Allen said.

Over the past 16 years, Tennessee American Water has invested more than $127 million in local water infrastructure while the average annual percentage increase in Chattanooga over the past 16 years is around 2.8 percent.

"Our company works to operate efficiently and control operating expenses," Allen said. "Our aim is to balance that goal with the continuous need for significant capital investment in local infrastructure to ensure system reliability and meet increasing state and federal quality requirements."

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