Chattanooga Residents Brace for Water Rate Increase Amid Cost of Living Concerns

Chattanooga Residents Face Potential Water Rate Hike

In the charming city of Chattanooga, residents are hearing some alarming news regarding their water bills. Tennessee American Water, a utility company that serves about 67,000 customers in the area, is looking to increase their water rates while simultaneously decreasing costs for new customers in more remote areas.

Mayor’s Concern: Cost of Living Crisis

During a public hearing organized by the Tennessee Public Utility Commission, Chattanooga’s Mayor, Tim Kelly, voiced strong opposition to the proposed rate hike. He pointed out that families and businesses alike are feeling the pressure of a cost of living crisis. “The cost of housing, the cost of groceries, and almost everything else has increased substantially,” he said. His emphasis? “The last thing that families and businesses in Chattanooga need right now is another increase in their monthly water bill.”

Proposed Rate Increase

The concern stems primarily from a request made by Tennessee American Water back in May for a near $5 increase in their rates, which would apply to the average Chattanooga resident. This year, they indicated they were seeking a staggering 25% rate increase for city residents. This comes in addition to annual hikes that have been in effect for over 11 years. Mayor Kelly expressed his discontent: “Our parents, grandparents, and great-grandparents have paid for Tennessee American Water’s infrastructure through their bills for generations. Raising rates now just isn’t right.”

Discrepancies in Billing

In an astonishing twist, the proposed rate hike would mean significant reductions for certain residents in newer, remote areas—those living in places like Suck Creek, whose bills could drop by more than 30%, or high-end homes in Jasper Highlands, which may see nearly a 29% decrease. Kelly questioned the fairness of these changes, stating, “It makes no sense, and Tennessee American Water can’t justify it.”

Request for Justification

As a response to the rate increase proposal, Chattanooga’s legal team asked the utility company for documentation that substantiates the costs associated with servicing these new, far-away areas. Surprisingly, Tennessee American Water reportedly did not have that kind of detailed information on hand.

Daphne Kirksey, a spokesperson for the company, claimed they kept records on cost and service, which they provided to the Tennessee Public Utility Commission. However, the disconnect has raised eyebrows among city officials and the community alike.

Impact on City Budget

This rate increase wouldn’t just affect residential bills; it could also hit Chattanooga’s budget pretty hard. As the only major Tennessee city reliant on a private firm for water services, the hike could mean nearly $100,000 in extra costs for the city in the first year, largely for wastewater treatment services. The Moccasin Bend Environmental Campus, for instance, currently pays over $515,000 for water at today’s rates.

Utility Company’s Position

According to Kirksey, the reasoning behind the requested increase stems from significant investments made in the local water system—$173 million worth of improvements that span from the last general rate increase in 2012 all the way through December 2025. “The request reinforces our commitment to investing in the water system to replace aging infrastructure, provide reliable service, enhance water quality, and comply with environmental regulations,” she stated.

What’s Next?

Chattanooga citizens are now left waiting for clarity on this issue. A ruling from the state’s public utility commission on the proposed rate hike is expected in the first quarter of 2025. As resident concerns grow, it’s clear that many are hoping for a reasonable resolution that doesn’t add strain to their already stretched budgets. Stay tuned for updates as this story unfolds!