Richard Floyd plans bill to fight water rates

Richard Floyd plans bill to fight water rates

April 5th, 2011 by Andy Sher in News

Tennessee state representative Richard Floyd

NASHVILLE - Calling Tennessee American Water Co.'s rate-increase requests "totally out of control," Rep. Richard Floyd said Monday he hopes his bill can plug what he considers the utility's "excessive" efforts to hike local water rates.

"They're totally out of control," Floyd said of Tennessee American, which is owned by American Water Works Co. Inc.

Floyd, R-Chattanooga, said he is working with legislative attorneys to ensure his attempt to curb the water company's ability to increase fees is "statutorily and constitutionally legal."

Tennessee American is owned by the New Jersey-based American Water Works and Floyd's legislation says a privately owned public utility that supplies water to a municipal government shall not initiate a rate case more than once every six years. It also says the utility's records would be considered a public record.

On Monday, Tennessee American was granted the largest rate increase in Chattanooga history when regulators formally approved the largest water rate increase in Chattanooga history - a 14.76 percent price jump that will raise costs across the board.

The Tennessee Regulatory Agency granted the approval, which will take effect today. The average local residential water bill will rise about $2.45 a month to $19.07 under the new rates.

The company has said in filings that the rate increase it sought was reasonable in light of its obligations to operate the utility, maintain its infrastructure and provide investors a reasonable rate of return.

Floyd said he is considering an amendment that would restrict the utility's ability to charge customers the costs it incurs to petition regulators for rate increases.

Tennessee American officials "don't care what they pay for some of these attorneys as long as they can pass it along to the ratepayers," he said.

Tennessee American officials declined to directly comment on Floyd's legislation.

"We don't have a direct comment regarding any legislation sponsored by Rep. Floyd in the General Assembly," spokeswoman Kim Dalton said in an email. "However, we continue to study all legislation regarding privately owned water utilities as we work through the legislative process.

"We understand and appreciate Rep. Floyd's position. Our company has the utmost respect for his legislative ability, and we look forward to working with him as the legislative session continues in the General Assembly."

Floyd said he thought about placing a percentage cap on the TRA's ability to grant increases but had concerns about that approach.

He also charged that, when compared to electric and natural gas utilities, "the water company right now is the only bad actor we've got in Hamilton County."