A state panel on Monday approved a proposed $2.39 million sale of the water system serving the Jasper Highlands residential development in Marion County to Tennessee American Water Co.
The action also resolves a state complaint that alleged violations related to the mountaintop water system and a company affiliated with Chattanooga developer John "Thunder" Thornton. The company agreed to pay a $50,000 settlement fee to the state.
Daniel Whitaker, a lawyer for the state Attorney General's office, told the Tennessee Public Utility Commission that the complaint was filed against Thunder Air on Aug. 13.
On Sept. 29, the parties entered an agreement that allows the complaint to be resolved and Tennessee American's acquisition of the water system to proceed, he said.
Thunder Air, doing business as Jasper Highlands Development, had said it entered the settlement agreement to avoid the time and expense of litigation and denied any wrongdoing related to the state complaint.
"We remain confident that our system is in full compliance with all regulations," said Dane Bradshaw, president of Thunder Enterprises, in an earlier statement.
Kenneth Hill, the Public Utility Commission's chairman, said the settlement agreement is in the public interest and will promote the sale of the water system and reliable and affordable service to Jasper Highlands residents.
He added that if the water system transaction doesn't close, the agreement is void and the parties can proceed with litigation.
Over the past decade, Thornton's companies have sold more than $100 million of property at Jasper Highlands and are preparing a fifth phase in the 8,893-acre development to add 150 additional lots for sale.
But in August, the Consumer Advocate unit of the state Attorney General's office said Thunder Air failed to obtain a certificate of public convenience and necessity concerning the water system at the mountaintop project near Kimball.
The filing said the company also failed to pay annual inspection fees and charged rates not approved by the Public Utility Commission. It alleged the company violated state law when the water system withheld or refused to provide service to customers.
Daphne L. Kirksey, external affairs manager for Tennessee American, said the utility already provides safe, reliable drinking water in the greater Chattanooga area, including to Suck Creek, Whitwell, Powells Crossroads and North Georgia.
"Acquiring the Jasper Highlands water system, which is geographically near our Whitwell operations in Marion County, will provide a multitude of benefits to our existing customers, to Jasper Highlands' water customers and to Tennessee American Water," she said earlier. "Among other things, consolidating systems provides a larger customer base over which to distribute fixed costs, capture operational efficiencies and utilize economies of scale."
Contact Mike Pare at mpare@timesfreepress.com. Follow him on Twitter @MikePareTFP.