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VOL. 37 | NO. 10 | Friday, March 08, 2013

AG: Utility bills would climb under legislation

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NASHVILLE (AP) — The state Attorney General says a measure pending in the General Assembly could cause bills from for-profit utility companies to climb significantly without much government oversight.

The Tennessean reported (http://tnne.ws/12FOZrH ) Attorney General Bob Cooper warned lawmakers in a letter sent this week that investor-owned utility companies would be able to raise their rates without having to prove that the increases are really necessary under the proposed legislation.

The legislation cleared a House committee on Wednesday and is supported by Gov. Bill Haslam. It would let the utilities raise their rates without going through the current review process, known as a "rate case," in which the companies must prove in a court-like setting that any price increase is necessary to keep them profitable.

The bill would not apply to publicly owned utilities such as Nashville Electric Service or member-owned cooperatives such as the Middle Tennessee Electric Membership Corp.

Tim Schwarz is the chief of external affairs for the Tennessee Regulatory Authority, which regulates rates set by the for-profit utilities. He said consumers would still be protected from unwarranted price increases and the TRA would ensure increases would have to be in the public's interest.

"We're not changing the existing general rate-making process," he said. "What this bill would do is provide other options for the agency to review proposed rate increases, rather than going through the current process, which is based on litigation. These are alternative rate-making methods that are in effect in some of our neighboring states."

Cooper's office contends that utility companies had overstated requests for rate increases by as much as 60 percent over the past decade. He said the current system forces utilities to adjust their requests before they are approved.

But Schwarz said the TRA would ensure that any rate increases "would have to be in the public's interest," Schwarz said. "There is still the same opportunity for parties to intervene. It is just a more-streamlined procedural process, based on a more-regular, analytic oversight."

Atmos Energy, which serves about 140,000 customers in Tennessee, supports the legislation, said Denise Manning, a spokeswoman for Atmos Energy. "We feel the legislation will provide a better look at a utility's operations and expenses on an ongoing, annual basis."