Tennessee Regulatory Authority powerless for now

photo Tennessee Gov. Bill Haslam

ABOUT TRAThe Tennessee Regulatory Authority's mission is to "promote the public interest by balancing the interests of utility consumers and providers while facilitating the transition to a more competitive environment," according to its website. It does this by setting rates for regulated utilities, such as electricity, water and natural gas, and maintaining consumer assistance programs.State lawmakers this year changed the agency's governance from a four-person, full-time board to a five-person, part-time board and a full-time executive director.

NASHVILLE -- Gov. Bill Haslam's newly reorganized Tennessee Regulatory Authority is off but not running since the governor and legislative leaders failed to appoint an executive and a quorum of directors by July 1.

Meanwhile, a six-month clock is already ticking on Tennessee American Water's June 1 request to hike Chattanooga's water rates by nearly 25 percent.

The TRA must decide on the request no later than November or the $10.5 million increase automatically will take effect.

Gas utilities Atmos Energy Corp. and Navitas, which operate in other parts of the state, filed rate-increase requests with the TRA on June 22 and July 2, respectively.

But the TRA last had a quorum of directors June 8. At their final meeting, Chairman Kenneth Hill and directors Sara Kyle and Mary Freeman named Hill as hearing officer in the Tennessee American case to keep proceedings moving.

"The clock started when they filed, and that's why I put myself in the position to try to expedite" matters, Hill said.

But the Atmos and Navitas filings came after Freeman quit to take a job in Memphis. The result? Without a quorum, the board can't even name a hearing officer right now.

Hill said Tuesday that getting a timely decision in the Tennessee American "depends on how much data comes in and how fast and how soon we can get hearings and reconcile testimony and come up with a decision."

"We're confident, at least at this point, because we were able to get ahead of the curve and get started on these procedurals," Hill said.

But, he added, the Atmos and Navitas rate requests "are another question because we're behind on those two."

No timeline

Hill and Kyle stayed on as part-time directors under the reorganization. Director Eddie Roberson, a Democrat, and Freeman left their positions. That means there are three unfilled board seats plus the executive director position.

Haslam spokesman David Smith downplayed the situation, Tuesday, saying, "We continue to move through the process and are committed to finding the best fits for the positions."

Asked when the governor anticipates filling the posts, Smith said, "It's as soon as we find the best fits for the positions."

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The appointment will be made jointly by Haslam, Senate Speaker Ron Ramsey and House Speaker Beth Harwell, all Republicans. Neither Ramsey nor Harwell responded to requests for comment.

Officials have interviewed 18 applicants, and it appears they have asked at least one back for a second interview. Smith said officials are willing to consider other applicants.

Nashville attorney Henry Walker, who frequently represents companies before the TRA, argued against Haslam's overhaul when the governor ramrodded the proposal through the Legislature.

"The bottom line is the agency cannot meet and cannot make a decision on any issue until they get a quorum," said Walker, who was the chief legal counsel of the TRA's predecessor, the Public Service Commission.

Walker and other attorneys who practice before the TRA note that recent Tennessee American rate cases have been bitter and lengthy. Battles have erupted over requests for additional company information by the state attorney general's Consumer Advocate and Protection Division and Chattanooga, intervening on behalf of ratepayers.

Hill acknowledged that if any party in the Tennessee American rate case chose to appeal one of his decisions, there is no quorum of directors to uphold his ruling. But he said that hasn't happened in his three years on the board.

Asked if the governor is concerned the delay might lead to automatic rate increases without a full hearing, Smith said he wouldn't comment on a hypothetical question.

He said Haslam "believes the new structure with a full-time executive director who comes in with a professional background and part-time directors who can lend their expertise from the fields outlined in the statute is the better way to do things more effectively."