In an effort to spur economic development in the region, Tennessee-American Water Company announced Monday that it has proposed a new economic development tariff to help community leaders in growing the region's economy.
Tennessee-American President William F. L'Ecuyer made the announcement on the eve of the 47th Annual Governor's Conference on Economic and Community Development at the Trade Center.
Commissioner of Economic Development Bill Baxter, Chattanooga Mayor Jon Kinsey, County Executive Claude Ramsey and Chamber Board Chairman Bill Sudderth joined Mr. L'Ecuyer in making the announcement.
Mr. L'Ecuyer said he was submitting the new rate to the Tennessee Regulatory Agency on Monday for its approval. The new rate will enable Tennessee-American to offer a 30 percent reduced water rate to any new company coming into its service area with new jobs for the community. The new rate also applies to any existing company that expands and creates new jobs.
"Our goal is to be a good partner for economic development in our community,¡¨ said Mr. L'Ecuyer. "We know the water business and believe we are in the best position to serve high-volume water users in this region. The new tariff is something we can do to assist all parties in Hamilton County with its economic development efforts.
Mayor Jon Kinsey at the podium as William L'Ecuyer, Bill Sudderth and Claude Ramsey look on."This tariff represents a win for the community, for the potential customer and for our existing customers. When you look at the list of companies that are high-volume users, you can see that these are companies that create good jobs. It is our desire to see companies that utilize high volumes of water be a focus of development activities."
Mr. Baxter praised Tennessee-American for its efforts.
"We are proud of the step Tennessee-American Water is taking to enhance economic development in Chattanooga and the entire region," said the state commissioner of the Department of Economic and Community Development. "The company is investing in Tennessee's long-term economic growth and success."
Commissioner Baxter also said the incentive by the water utility was unique, noting it was the first he had heard of within the state by a water utility.
Companies qualifying for the new rate can be either new companies to the region or existing companies that expand their job base and water usage. The new company would receive a substantial rate reduction for the first five years of operation. In the first year the customer would receive a 30 percent reduction, with decreases of five percent each year. The fifth and last year they would receive a 10 percent reduction.
"Since Tennessee-American is a regulated utility," Mr. L'Ecuyer said, ¡§an added benefit is that all current customers will benefit from the expansion since the fixed costs of the system will be spread over more users."
Companies must meet two criteria to receive the rate reduction. They are:
- A company must create approximately 150 jobs by locating here or a current company must create the same number of jobs through an expansion. Those addition jobs equal approximately 1/10 of 1 percent of the population in the TAWC's service area.
- A new or expanded company must also use an amount of water that is equal 1/2 of 1 percent of TAWC's annual consumption.
"Any incentive we can use to facilitate or accelerate economic expansion is a good thing. Tennessee-American Water Company is to be commended for this active role it has taken in the region's economic development," said Mr. Ramsey of the announcement.
"It's important that all of us in this community work together for new and expanded economic development. I commend Tennessee-American Water Company on its efforts," added Mayor Kinsey.
Mr. L'Ecuyer said that the announcement is important to Tennessee-American because it reinforces the company's commitment to the city it has served for more than 100 years.
"Our commitment to be a good corporate citizen in this community has always been among our highest priorities. One year ago, we restated that commitment to Mayor Kinsey. We have enjoyed a productive relationship with the mayor over the past year and have done all we can to help the community, whether it be in helping the public education system or in making today's announcement."
Mr. Sudderth, representing the agency charged with leading the economic development efforts in Chattanooga, said the new tariff is the right thing to do.
"Tennessee-American's tariff will be an important incentive we can offer companies who are looking at expanding or locating in our region," said the chairman of the Chamber of Commerce. "This is exactly the kind of proactive economic development work that will help us bring Michael Porter's cluster-based approach to competitiveness into the community."