Consumer advocate urges cut in Chattanooga water company rate hike

Consumer advocate urges cut in Chattanooga water company rate hike

September 20th, 2012 by Dave Flessner in News

The Tennessee American Water Company is seen in the foreground of this aerial file photo.

The Tennessee American Water Company is seen in...

Photo by John Rawlston /Times Free Press.

Tennessee's consumer advocate is recommending Tennessee American Water be granted only about a fourth of its request for a 24.9 percent increase in water rates.

The Tennessee Attorney General's office said today that the Chattanooga utility should be granted only $2.8 million of the $10.6 million it has requested in a rate proposal to be heard today by the Tennessee Regulatory Agency.

TRA directors will conduct a public hearing today at the Hamilton County Courthouse from 4 to 7 p.m. to hear public comments on the company's proposed increase in water rates.

State Attorney General Bob Cooper said if regulators approve the full increase sought by Tennessee American, Chattanooga water rates will be the highest of any major city in Tennessee.

"We will urge the TRA to reject this proposed rate increase as disproportionate in relation to the company's ability to make a fair profit," Cooper said in a statement today.

Tennessee American claims it needs to raise water rates to cover increased costs for energy, labor, chemicals and maintenance work of its network of pipes. The TRA granted a 14.76 percent rate to the water company in 2011. That increase was less than half what Tennessee American sought but still the largest-ever rate increase for the company's 74,500 customers.

The TRA will conduct a separate hearing on the merits of the case on Oct. 15 and must decide on any rate increase by December. The cities of Chattanooga, Signal Mountain and Walden and the Chattanooga Regional Manufacturers Association have each filed objections to the utility's proposed rate increase.