Investments in local water infrastructure drive request; Cost of
local drinking water service remains less than a penny per gallon
CHATTANOOGA, Tenn.--(BUSINESS WIRE)--Jun. 1, 2012--
Second graph, second sentence should read: This filing covers local
water infrastructure investments of an estimated $25 million. (sted This
filing covers local water infrastructure investments of an estimated
$13.3 million.)
The corrected release reads:
TENNESSEE AMERICAN WATER FILES RATE INCREASE WITH TENNESSEE
REGULATORY AUTHORITY
Investments in local water infrastructure drive request; Cost of
local drinking water service remains less than a penny per gallon
Tennessee American Water today filed a general rate case application
with the Tennessee Regulatory Authority (TRA) requesting an increase in
drinking water rates for customers in the company’s Chattanooga, Lookout
Mountain, Lakeview, Suck Creek and Lone Oak service areas.
Tennessee American Water’s ongoing investment in local water
infrastructure to renew and replace water treatment facilities, pumps
and pipelines is one of the main drivers for the rate request. This
filing covers local water infrastructure investments of an estimated $25
million.
Over the past 16 years, Tennessee American Water has invested more than
$127 million in local water infrastructure while the average annual
percentage increase in Chattanooga over the past 16 years is around 2.8
percent.
In Chattanooga, the monthly water bill for an average residential
customer (4,153 gallons per month) today is less than $20.00 ($19.20)
per month.
Many communities across the country are facing the challenges of aging
water and wastewater infrastructure and associated rate hikes. The
United States EPA says the nation’s water utilities will need to make
more than $355 billion in infrastructure investments over the next 20
years to replace thousands of miles of pipe and for upgrades to
treatment plants, storage tanks and other assets to ensure public
health. According to the American Society of Civil Engineers,
Tennessee’s (entire state) drinking water infrastructure needs an
investment of $2.77 billion over the next 20 years.
Deron Allen, president of Tennessee American Water, said, “Our company
works to operate efficiently and control operating expenses. Our aim is
to balance that goal with the continuous need for significant capital
investment in local infrastructure to ensure system reliability and meet
increasing state and federal quality requirements.”
If the new rates are approved as requested, they would generate
approximately $10.5 million in additional revenue for the company. There
is no immediate impact for customers. Over the next six months, the
Tennessee Regulatory Authority will conduct an extensive review of
Tennessee American Water’s rate application that includes review of
thousands of pages of documentation to demonstrate that the request is
just and reasonable. The process, which will include public input, takes
about six months. Any increase granted by the TRA in this case would be
effective about December 2012, which would be more than 1.5 years since
the last water rate increase in April 2011.
According to the company’s request, if approved in full, drinking water
rates for a residential customer who uses 4,153 gallons of drinking
water per month would:
-
Increase in the Chattanooga service area by $5.94, or about 20 cents
per day, to $25.15.
-
Increase in the Lookout Mountain service area by $5.24, or about 17
cents per day, to $30.16.
-
Increase in the Lakeview service area by $8.06, or about 27 cents per
day, to $30.16.
-
Decrease in the Suck Creek service area by $2.17, or about seven cents
per day, to $39.41.
-
Decrease in the Lone Oak service area by $10.06, or about 34 cents per
day, to $41.38.
“Our rates reflect the true cost of providing water service to our
customers. This includes significant investment in local infrastructure
to enhance and maintain our systems to ensure the quality and
reliability of our service,” said Allen, “These investments enhance
service quality, reliability and fire protection for our customers while
keeping the cost of water service for most local households at less than
a penny per gallon.”
ABOUT TENNESSEE AMERICAN WATER
Tennessee American Water, a wholly owned subsidiary of American Water
(NYSE: AWK), is the largest publicly traded water utility in the state,
providing high-quality and reliable water services to more than 350,000
people in Tennessee and northern Georgia. Founded in 1886, American
Water is the largest publicly traded U.S. water and wastewater utility
company. With headquarters in Voorhees, N.J., the company employs
approximately 7,000 dedicated professionals who provide drinking water,
wastewater and other related services to an estimated 15 million people
in more than 30 states, as well as parts of Canada. More information can
be found by visiting www.amwater.com.
Source: Tennessee American Water
Tennessee American Water
Kino Becton, Manager-Government Affairs
423-755-7623
Kino.Becton@amwater.com
or
Deron
Allen, President
423-755-7607
Deron.Allen@amwater.com
