Tennessee American Water President Deron Allen talks about service to customers from the board room at the private utility’s Broad Street headquarters.TYPICAL HOUSEHOLD WATER COSTS• 2011 – $16.62• Current – $21.56• Proposed – $21.80Source: Tennessee American WaterHISTORY OF HIKES• 2011 – 14.8 percent• 2012 – 12.72 percent• 2013 – 1.1 percent (proposed)Source: Tennessee American WaterTENNESSEE AMERICAN PROPOSALTennessee American’s proposal includes:• Replacement of water infrastructure• Operational expenses stemming from economic development• Safety and environmental compliance• Trackers for purchased power, chemical, purchased water, waste disposal, and inspection fees that will allow automatic rate increases and decreasesSource: Tennessee American Water
In a bid to dodge the fierce legal battles that have defined its past double-digit rate hikes, Tennessee American Water is toning down its rate rhetoric this year as it seeks approval for a new framework that will automatically pass many costs onto customers without litigation.
The utility’s latest proposal calls for a 1.1 percent increase, which will add about 24 cents to the typical residential monthly water bill. The rate increase, if approved by state regulators, would raise $7.5 million in new revenue for Tennessee’s biggest privately owned water utility.
Tennessee American Water is owned by Vorhees, N.J.–based American Water Works Company, which is the largest publicly-traded water company on the New York Stock Exchange.
This year’s single-digit increase for Chattanooga ratepayers pales in comparison to past proposals for rate hikes as high as 35 percent if adjusted to include pass-through costs for chemicals, purchased water, waste disposal, pensions, fuel, regulatory costs and power. The average residential water bill was just $16.62 two years ago, but will tick up to an average of $21.80 under the latest increase.