Signal, Walden avoid rate increases

Signal, Walden avoid rate increases

October 25th, 2012 by Kelsie Bowman in Local Regional News

Water customers of the town of Signal Mountain and Walden's Ridge Utility District are not going to see a 12.72 percent rate increase imposed on them by Tennessee American Water like the rest of the utility's Chattanooga area customers.

That's not for reasons many may think.

"There was a lot of miscommunication about the Signal Mountain increase," said Tennessee American President Darren Allen. "In the end we feel the total package is fair and equitable to all parties. Signal Mountain and Walden's Ridge were heard. We try to be as fair as we can."

Signal Town Manager Honna Rogers said Signal Mountain did not threaten to leave the water company nor does it have plans to do so. But with a future connection to WRUD's pipeline which delivers water up the back of the mountain in the works for cases of extreme emergencies, along with the current expired status of Signal's contract with Tennessee American, separation from the water company is logistically a possibility, she said.

"[Bolting from Tennessee American] was a possibility because Walden's Ridge has been working on finding different [water] sources," she said. "We are proceeding forward with the emergency interconnection [with WRUD]."

WRUD reportedly did threaten to bolt from the water company, according to Allen, but manager Ron West was not available for comment.

"It's a risk," said Allen in reference to Signal Mountain or WRUD canceling their contract. "What it does is it puts a significant risk on other customers. Having Signal Mountain and Walden's Ridge stay on Tennessee American benefits not just [those two customers], it benefits all the customers."

Signal Mountain and WRUD are referred to as "sale for resale customers," he explained, meaning the two smaller utilities buy water from Tennessee American and resell the water as a third party to their own customers. As agreed upon in its original contract with Tennessee American, Signal Mountain owns the pump station and pipeline that carries water up the front of the mountain to its residents. Tennessee American does, however, own the pipeline in Walden's Ridge.

"We pay all the costs of keeping that [pump] station up," said Rogers. "Our main argument was that ... we did not feel it fair that we pay the same rate as other people."