The public portion of the state’s probe into the merits of Tennessee-American Water Company’s proposed 20.58 percent rate increase got underway Monday evening with a sparsely attended hearing in the Hamilton County Courthouse.

A second public hearing is set for 8:30 a.m. Tuesday in the same location.

Tennessee Regulatory Authority directors will be in Chattanooga conducting proceedings on the proposed increase all this week. After that, both proponents and opponents of the increase will have until Aug. 29 to present post-hearing arguments.

TRA directors plan to decide the case by Sept. 22, and the rate increase – if approved – will go into effect on Oct. 1.

Monday evening, state Rep. Richard Floyd and other opponents noted that this proposed TAWC rate increase comes on top of last year’s 12 percent increase – and predicted it soon will be followed by another.

“I’d be willing to bet my retirement they’ll be back again next year,” said Rep. Floyd, who told regulators his phone has been ringing off the hook with calls from constituents upset about the proposed increase.

Other opponents, representing area businesses, said the rate increase could have a devastating impact on some employers.

Dan Nichols, manager of Koch Foods, told TRA directors that his company is one of Chattanooga’s top water users.

Already, he said, a variety of soaring costs have forced the company to cut back on production – 22 percent last week, and another 18 percent Monday.

“If costs get out of line as they appear to be doing in Tennessee, this company does not have a very bright future,” Mr. Nichols warned.

But an array of TAWC employees and contractors spoke in favor of the proposed rate increase, saying that the revenues it will bring in are sorely needed and will be well used.

Ray Eslinger of Eslinger Contracting in Ringgold said the water company promotes growth through a rebate program and other initiatives, and faces serious challenges in continuing to provide quality water to its customers.

For example, he noted, “I worked on a water line (for TVWC) that was put in back in 1878.”

Jerry Hightower, an engineer, said he believes customers are either confused or misled regarding the proposed increase.

For example, he said, many families think nothing of spending $60 per month on cable TV service – a luxury – but are upset by the prospect of increases in the cost of necessities such as water.

Further, many of the people who are protesting the rate increase routinely buy bottled drinking water, at a cost many times higher than that charged by TVWC.

But critics such as Larry Parks, a former chief financial officer, remained unconvinced.

“As a financial officer, I know that accounting can be arranged to justify any rate you want to charge,” Mr. Parks told TRA directors.