Hixson Utility Will Increase Water Bills Next Month; Tennessee American can follow suit
Water bills will rise for nearly 28,000 homes and businesses in Hixson next week and could rise next week for more than 78,000 Tennessee American Water customers in Chattanooga.
The Hixson Utility District will increase monthly water bills by 81.5 cents per month for the typical residential water user, starting August 1, by adjusting the minimum monthly fee consumers pay for residential connections. The typical residential water charge for the semi-monthly bill in Hixson will increase by about $1.63 to cover inflationary cost increases since the last rate adjustment five years ago.
Chattanooga water users could see their monthly bills rise even more if regulators agree to allow Tennessee American Water to pass through $20.4 million in annual utility expenses for upgrades and expansions. drinking water system over the past year. Tennessee American has applied to the state Utilities Commission for approval to raise water rates, effective Aug. 8, while the commission continues to review the company’s annual filing to recover its capital costs.
(READ MORE: New industrial park planned at former Dupont site in Hixson)
Daphne Kirksey, spokeswoman for Tennessee American Water, said the company proposed to increase Chattanooga’s average residential customer by $1.30 per month, based on 4,154 gallons of usage. Tennessee utilities are permitted to pass on the cost of approved capital investments necessary to maintain and meet water quality and delivery requirements, subject to regulatory review by the Tennessee Public Utilities Commission.
“Tennessee American Water has asked TPUC to allow the tariffs to take effect August 8 while TPUC determines a hearing date,” Kirksey said in an emailed statement.
The Hixson Utilities District Board has already approved its water rate increase, which will be added to August bills and begin to appear with the next billing cycle. Greg Butler, executive director of Hixson Water Utility, said in a phone interview Wednesday that chemical costs have risen more than 60% and other material expenses have jumped more than 35% in the past year. .
“We continue to see higher costs for materials, chemicals, energy and equipment, but we are in a very good financial position to be able to absorb some of these increases,” Butler said.
In January, utility Hixson contracted utility consulting firm Jackson Thornton Utilities to conduct a cost-of-service study. The consultants determined that water production expenses have grown at a faster rate than revenues, “and this trend is expected to continue for the foreseeable future,” Butler said.
“Periodic rate studies are recommended for the utility industry, and the last rate study was nearly 10 years ago,” Hixson Utility Board commissioners said in a statement to customers. “The rate structure was changed as a result of the previous study, but the district has not increased rates since the mid-1980s.”
Although the minimum charge has increased, the rate per gallon of water has not changed in decades.
In 2014, Hixson Water Utility voted to raise the minimum rate by about 30% over the next three years after going nearly two decades without any rate changes.
While water rates have not changed, sewer rates have increased to double digit levels in recent years. Hixson Utility District also charges sewer fees for the City of Chattanooga and the Hamilton County Water and Wastewater Authority, which more than doubles the effective bill for most consumers.
Despite rising water rates, Hixson Water Utility still has the cheapest municipal water in Tennessee. The Hixson Utility District is the only local water utility capable of sourcing water from springs and wells. The utility treats the water with a few chemicals, but there is no need to filter and treat the water like most utilities that draw from surface water like the Tennessee River.
(LEARN MORE: The Brand: Tennessee American Water is the largest private water utility in Tennessee)
Hixson Utility District is the largest of Hamilton County’s six water utility districts, but most of the county is still served by Tennessee American Water, which is owned by American Water Works.
Contact Dave Flessner at [email protected] or 423-757-6340. Follow him on Twitter at @dflessner1