Tennessee American Water has submitted to the Tennessee Regulatory Authority its 2015 infrastructure capital projects in conjunction with the new alternative rate mechanism.
Approved earlier in 2014 by the Tennessee Regulatory Authority, the alternative rate mechanism creates a process whereby Tennessee American Water will annually submit by December 1 its capital infrastructure projects for the following year and the cost associated with those projects to the TRA.
The filing is a 5.61 percent increase, applied to all water charges and to be effective Jan.
1, 2015. This represents a $1.21 monthly increase on the average Chattanooga residential customer bill. This allows for Tennessee American Water to ensure continued investment in the local water system while reducing the possibility of rate shock.
Historically general rate cases filed in the past have asked for increases at a larger percentage due to the regulatory lag involved. The alternative rate mechanism gives customers rate stability and allows Tennessee American Water to accelerate the replacement of aging water infrastructure, comply with increasing environmental standards and support local economic development.
The 2015 infrastructure capital projects total over $17.5 million. The largest capital infrastructure project planned for 2015 will be the $14.2 million residuals centrifuge facility at the water plant. The centrifuge will remove zinc which naturally occurs in the Tennessee River. This is related to EPA requirements with the Clean Water Act.
“Our customers also play an important role because each time they make a water payment, they help to make critical improvements to our water system,” said President of Tennessee American Water Deron Allen. “We plan these projects based on greatest need, balanced by the price our customers pay. We are also very careful to manage our costs by operating as efficiently as possible.”