Tennessee utility regulation bill headed to Gov. Bill Haslam

photo The Tennessee State Capitol in downtown Nashville.

NASHVILLE - A Haslam administration initiative that could result in annual rate increases for local customers of for-profit utilities like Tennessee American Water and Chattanooga Gas is on its way to the governor.

Senators gave final approval to the bill Monday on a 29-1 vote. The House passed the bill last month.

Meanwhile, the House voted to let Tennesseans decide in 2014 whether to ban a state income tax after members gave final approval to a proposed amendment to the Tennessee Constitution prohibiting the levy.

Representatives voted 88-8 for the resolution, sponsored by Republican Caucus Chairman Glen Casada of Franklin.

Earlier in the Senate, Majority Leader Mark Norris, R-Collierville, called Republican Gov. Bill Haslam's utility bill a "continuing part of the administration's top-to-bottom reforms."

The legislation has drawn concerns from State Attorney General Bob Cooper's office that the Tennessee Regulatory Authority would no longer effectively protect consumers from monopolies.

Among other things, the bill would allow the TRA to approve "trackers" for companies that allow them to pass along some costs, such as fuel, automatically on to consumers.

The bill also authorizes the TRA to approve "alternative methods" for utility rate reviews and cost recoveries instead of full-blown rate cases.

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In a rate case, cities, businesses or the attorney general's Consumer Advocate Division can intervene if they believe the hikes go beyond a utility's legal ability to earn a reasonable profit.

Cooper's office said in a memo that utilities had overstated their rate requests by as much as 60 percent over the past 10 years. The office said the rate cases protect consumers against unwarranted increases.

"What this does in our opinion is make it more likely that rates will increase for business and households," Assistant Attorney General Vance Broemel told a House panel last month.

But officials at the TRA, which was reshaped personally by Haslam and now has an executive director who is a personal friend of the governor's, maintain that consumers will have adequate protections.

In his description of the bill Monday night, Norris said Broemel acknowledged the attorney general's office could still intervene.

Speaking to reporters earlier Monday, Haslam said, "I think it'll have the appropriate oversight."

The bill also cuts inspection fees for utilities to the tune of $1.1 million. Savings would be passed on to customers, proponents said. The TRA does not regulate most telephone companies. Rates charged by public power distributors like Chattanooga's Electric Power Board and electric cooperatives are not governed by the TRA.

In other legislative matters:

• Cock fighting -- Spurs flashed in the Senate as a bill making cockfighting a felony failed on a 15-8 vote despite the sponsor's argument that some people involved in Tennessee's favorite illegal gambling tradition have been linked to Mexican drug cartels.

The bill, sponsored by Republican Caucus Chairman Bill Ketron, of Murfreesboro, needed 17 votes to pass.

Under the bill, a first offense for cockfighting would have remained a misdemeanor. But subsequent offenses would be a felony punishable by up to six years in prison and fines up to $3,000.

Spectators would have been slapped with mandatory $500 fines.

"This bill is not about chickens," argued Sen. Frank Niceley, R-Strawberry Plains. "It's not about cockfighting. It's about killing animal agriculture in America."

He attacked the Humane Society of the United States, which supported the bill.

"We've killed this bill for a long time," said Niceley, who last week claimed President Andrew Jackson of Tennessee once refereed a cockfight on the White House's grounds. "If you can't vote no, I'd appreciate you to pass [not vote]."

Ketron later told reporters he thinks the bill died because of the cockfighting-tradition in rural areas of the state.

"You eliminate bingo in churches ... and it's OK to turn a blind eye to this?" The Associated Press quoted Ketron saying later. "These guys get all riled up out in these rural areas, and they start calling and putting pressure on their members, and it scares them. Are you a cock or are you a chicken?"

Critics contended the bill left open the possibility of farmers being prosecuted for raising roosters that could be used in cockfighting.

"There's a lot of concern about this bill in the agriculture community," said Sen. Charlotte Burks, D-Monterey. "Our farmers have to be careful."

• Clerk fees -- Senators approved a bill allowing county clerks deny applications for vehicle registrations and renewals if the applicant owes any fees to the clerk.

The bill, sponsored by Sen. Todd Gardenhire, R-Chattanooga, passed on a 22-8 vote and now goes to the House.

"This bill just allows the county clerk to collect bad checks when someone comes in on renewals or registration," Gardenhire said.

The bill is intended to force applicants who previously paid for their tags with a bad check pay up. Clerks can charge a 10 percent fee on top of the unpaid bill.