Chattanooga Appeals Previously-Approved Water Rate Increase
The City of Chattanooga has formally appealed the decision of the Tennessee Regulatory Authority granting a 12.20% rate increase to Tennessee American Water Company in the rate case filed by TAWC in 2006.
Mike McMahan, Chattanooga Assistant City Attorney, said, "The City of Chattanooga has great respect for the TRA, but believes that the Authority did not correctly apply the provisions of Tennessee law that place the burden on TAWC to prove that it is prudently managing its system and that the costs it seeks to pass on to ratepayers are just and reasonable."
The City of Chattanooga has also intervened in the 2008 TAWC rate case to oppose TAWC's request for a rate increase of more than 19.67%. The City's opposition focused on the very large increases in administrative fees that TAWC pays to its parent, American Water Works Company, and to other related companies.
A spokesperson for the TAWC has said, "Tennessee American Water is asking the TRA to reflect on our rates the increased operating costs and expenses related to approximately $21.4 million in capital improvements that will be made between now and August 2009. Included in those projects will be an $8.8 million upgrade to the main water treatment plant at Riverside Drive; and $6.6 million for water main, meter and hydrant replacement. Tennessee American Water, which has served customers for 138 years and is one of the city's oldest businesses, asked the TRA for an increase in revenue of $7.645 million."
"If the total increase is approved, water will remain one of the best values residents of Chattanooga receive every month when they pay utility bills," said John Watson, president of Tennessee American Water. "Like other businesses, Tennessee American Water has seen a significant increase in energy expenses as well as a government-mandated increase in pension costs for the company."
