Tennessee American Water receives approval for surcharge

The Tennessee Regulatory Authority has approved Tennessee American Water’s request for a surcharge that collectively covers approximately $7.5m in local water infrastructure improvements that the company has made or will make in 2014.

Tennessee American Water president Deron Allen said that similar alternative rate mechanisms are being used in other states to encourage ongoing infrastructure replacement (pipes, pumps, hydrants, etc.) at necessary levels while holding down the overall costs for the filing and administration of general rate cases with state commissions.

Allen said the goal of the new riders and an expense tracker is to allow Tennessee American Water to continue making necessary investments in the local water system’s infrastructure with minimal impact to customers’ rates.

Allen stated, "Our goal is to keep the local water system strong and viable today and for generations to come. Ignoring the infrastructure needs of our water system, over time, would be a disservice to our customers and community."

The average total impact for a residential customer in Chattanooga would be approximately 23 cents per month for all three riders.

However, for 2014 bills, customers will actually see a decrease of 2 cents as a result of decreased fee tracker expenses in 2013.

Tennessee will collectively spend around $3.5bn over the next 20 years to renew and replace aging infrastructure, according to a study by the American Society of Civil Engineers.