Wednesday, July 25, 2012
Increased water costs to the town of Signal Mountain and Walden’s Ridge Utility District due to Tennessee American Water’s requested rate increase will trickle down to residents.
It could be a deluge.
TAW, which serves nearly 400,000 people across the state through secondary providers, is asking for an 11 percent increase across the board on water usage up to 45,000 CCF, about 748 gallons. Anything over that each month would accrue a 93 percent increase on the additional water used.
Waldens Ridge Emergency Services alone used 1,564 gallons of water in the month of June, according to representative Andrew Fisher.
“On average three to four times a year we pass that amount [45,000 CCF],” said Signal Mountain Town Manager Honna Rogers. “If history continues [Tennessee Regulatory Authority] won’t give them that big of an increase, but they give them typically something. Last year [Tennessee American] asked for a 23 percent increase and got 15 percent. Ninety-three percent, even a portion of that is pretty big.”
For the town of Signal Mountain — and its approximately 3,100 water customers — that could mean roughly an additional $84,000 annually in a typical year, according to her. WRUD Manager Ron West could not be reached for comment in time for this article, but said previously that his utility would “just have to pass [additional costs] along. Last time [there was a rate increase] we were able to only pass on about half the cost to customers.”
It is still undetermined how that would translate onto customers’ bills should the rate increase go into effect. Billing could follow the same monthly structure as the rate increase, or an estimated annual amount could be broken down into monthly figures.
Rogers is studying the town’s software to see what the possibilities are; the Town Council will have to elect one or the other based on that.
“What’s frustrating about this is there are needs within the town … some infrastructure things we need to fix,” Rogers said. “Some of that may need a rate increase, and it’s awfully hard for our residents to pay for needed improvements here when they keep getting double-digit rate increases [from Tennessee American].
“We’ve had to raise the rates twice … and none of that is going to our needs.”
This comes at a time when WRUD is about to undertake a project to bring the water main across the McCoy property and connect it to water lines on Miles Road so it can begin updating undersized and outdated lines throughout the area.
The town of Signal Mountain, which pumps its own water up the mountain instead of having it delivered by Tennessee American like WRUD, already carries the burden of “several thousands of dollars [spent] maintaining the pump station at the bottom of the mountain,” according to Mayor Bill Lusk.
Yet the town will be receiving the largest rate increase of all Tennessee American’s local bulk buyers as the statewide utility seeks to put all its customers on the same rate structure. All Tennessee American’s users are currently paying different amounts based on the cost to service each individual buyer, Rogers said.
“The real issue to us is not only are they giving us a rate increase, which is the third double-digit rate increase since I’ve been here four and a half years, but they’re making us equal with all the bulk buyers in the area,” she said. “It’s not equitable because we’re not equal with them. We have to pay pumping costs and maintenance costs for our [pump] station.”
Signal Mountain officials will argue that case at the rate increase hearing to be presided over by the TRA Oct. 15-19. The location of the hearing has not yet been determined. Unless Chattanooga successfully petitions to have the case heard locally, the proceedings will likely take place in Nashville.
“When they hold the hearings I do believe it does help your case if [citizens] petition,” Rogers said.
That could be a moot point, though, according to Lusk.
If the TRA fails to vote on the case within six months, the requested rate increase will go into effect automatically, Lusk said. The TRA doesn’t have enough members to vote currently, according to him. Gov. Bill Haslam must appoint more, but those appointments must then be approved by the state legislature before they can go into effect. The legislature is not scheduled to meet until January.