A coalition of citizens and businesses are vowing to fight the 20.4 percent water rate hike proposed by Tennessee-American Water Company. Tennessee-American’s latest double-digit rate hike request came just one year after the foreign-owned utility was granted a 12.3 percent increase by the Tennessee Regulatory Authority (TRA).

John Watson, president of Tennessee American Water Company, responded by saying Chattanooga residents receive their water for less than a penny a gallon.

The TRA will be holding week-long public hearings in Chattanooga beginning Aug. 18.

“If Tennessee-American’s request is approved, our water rates will have increased by 35.1 percent in just over a year,” said Chattanooga businessman Randy Baker, chairman of the Fight the Hike campaign. “That’s higher than the 32.1 percent increase in the price of gasoline over the same period of time. How can Tennessee-American justify an increase of this magnitude when the average family is struggling to scrape together money to keep gas in their car, food on their table and mortgage payments current?”

The group said according to the first quarter 2008 financial report from American Water, Tennessee-American’s parent company, the company’s revenue increased 8.2 percent to $508.8 million.

The group said, "Tennessee-American claims the proposed $7.645 million rate increase is to help recover operating and infrastructure costs. But, Fight the Hike says Tennessee-American must accept responsibility for its operating expenses, and customers should not be forced to bear the full cost of improvements."

“We citizens own our water, so Tennessee-American’s unjust and exorbitant rate increase is simply for the service of treating and distributing our water, and recovering costs that they should cover with their operating revenue,” added Mr. Baker. “When one business monopolizes a service – like with Comcast cable – we get hammered with rate increases year after year. It’s time we stand up and say ‘we’re not going to take it anymore.’”

He said, "American Water, majority-owned by Germany-based RWE, has been systematically raising rates for many of its customers in the 32 states in which it owns water companies. In the first three months of this year, American Water reports that it filed rate applications in New Jersey, California, Virginia, Tennessee and Missouri for $231.1 million in increased annualized revenues. On May 30 of this year, American Water sought another $14.7 million in revenue in West Virginia.

"Historically, the TRA approves a lower percentage increase than the water company requests. In May 2007, the regulatory agency that provides utility oversight approved a 12.3 percent increase in response to the water company’s requested 19.7 percent hike. Still, Fight the Hike notes that the 2007 increase was the single highest increase to date, and the proposed increase for 2008 represents the largest increase in the company’s 138-year history."

“Once you wade through the rhetoric, it appears that the company repeatedly claims it does not earn enough revenue,” said Ray Childers, president of the Chattanooga Manufacturers Association. “Instead, they’re passing on as much of their debt and cost as possible, no matter the amounts and impacts, and they’re doing it by seeking unreasonably frequent, large increases year after year. While manufacturers have always been resourceful, such rate increases cannot continue every year.”

The group said Tennessee-American "has accumulated more than $1.2 million in legal and expert fees for the last two rate proceedings in Tennessee. These expenses alone would represent a four percent rate increase, which Tennessee-American demands that ratepayers – not the utility’s owner – pay."

The consumer advocacy group has a website, FighttheHike.org, that "details the history of Tennessee-American’s rate increase requests, and offers an opportunity for concerned citizens to voice their opposition about the current proposal to elected officials and the TRA with the click of a button. Like the consumer-led Fight the Hike campaign, Chattanooga’s city and county governments and the Chattanooga Manufacturers Association oppose the rate increase sought by the water utility."

“Tennessee-American has been aware of its operating revenue and infrastructure needs for quite some time,” said Mayor Ron Littlefield. “The continued requests for outrageous increases call into question the effectiveness and efficiency of the management of their financial resources and facilities. We must be as vigilant in holding them accountable to their responsibilities as they are in trying to get us to shoulder their burden.”

“I support the Hamilton County Commission’s April 10 resolution opposing the Tennessee-American Water Company’s proposed rate increase,” said County Mayor Claude Ramsey. “Like the commission I believe the increase request is excessive on the heels of a recent 12.3 percent increase. This rate increase would be harmful to many people in Hamilton County.”

Mr. Watson said, "Today, tomorrow and everyday, one gallon of high-quality water is delivered to your home for less than a penny.

"The employees of Tennessee American Water take great pride in working hard each day to ensure the more than 390,000 people we serve have a dependable supply of water at a good value.

"Our recent request to the Tennessee Regulatory Authority, if approved, would increase the average water bill by 3.65 a month or 12 cents a day.

"Tennessee American Water is asking the Tennessee Regulatory Authority to reflect in our rates the increased operating costs and expenses related to approximately $21.4 million in capital improvements that will be made between now and August 2009.

"Like many of our customers and companies in this community we have experienced rising costs in fuel, power, and chemicals. Our employees work hard everyday to run Tennessee American Water efficiently and fulfill our responsibility to serve the public's interests.

"Tennessee American Water supports an open and transparent process by the Tennessee Regulatory Authority. We welcome the input from our customers.

"This morning's action by these companies, elected officials, citizens, and organizations in this community is part of that input.

"We are concerned that some may have signed this petition without having the benefit of all the facts in our rate case. If this request for a rate increase were approved in full by the Tennessee Regulatory Authority, the Tennessee American Water's customers will still receive one gallon of tap water delivered to their homes and businesses for less than a penny a gallon."