The Tennessee Attorney General’s Office has announced a significant decision by the Tennessee Public Utility Commission, which denied the majority of a proposed $13.9 million annual rate increase by the Tennessee-American Water Company. This ruling represents a considerable achievement for the Attorney General’s Consumer Advocate Division, which actively protects Tennessee consumers’ interests in matters involving for-profit utility companies. The City of Chattanooga also played a pivotal role in opposing the rate hike.
Attorney General Jonathan Skrmetti commended the efforts of the Consumer Advocate Division, noting that their diligence resulted in a savings of nearly $13 million annually for utility customers in and around Chattanooga.
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The Commission’s decision only approved a $1 million increase from the originally requested $13.9 million. As a result, the average customer within Chattanooga will experience a nominal monthly increase of $0.38, while those residing outside the city will face a slightly higher increase, ranging from $0.44 to $1.34 per month.
Additionally, the Commission denied a request from Tennessee-American to raise the rate of return on its capital investments in the water system from a desired 7.94% to 6.85%. This decision is projected to lower the approved revenue requirement by over $3.25 million. The Commission also refused Tennessee-American’s proposal to consolidate rates across different communities in the Chattanooga area, such as Lookout Mountain and Jasper Highlands.
For further information, the full decision can be accessed here.
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Tennessee Sets New Interest Rate at 11.50 Percent
The Tennessee Department of Financial Institutions has announced a new maximum effective formula rate of interest at 11.50% per annum, effective February 4, 2025. This rate is based on a 4% ceiling added to the Federal Reserve’s weekly average prime loan rate of 7.50%. Commissioner Greg Gonzales noted that this rate will remain until the Federal Reserve updates the average prime loan rate. The interest rates are regulated under Chapter 464, Public Acts of 1983. For more information, Public Information Officer Alica Owen can be contacted at (615) 289-4738.