Report: Tenn. AG says proposed legislation would mean increased utility rates

By Jessica M. Karmasek | Mar 11, 2013

NASHVILLE, Tenn. (Legal Newsline) -- Tennessee Attorney General Robert Cooper Jr. contends legislation being pushed by Republican Gov. Bill Haslam's administration will end up increasing utility rates.

Cooper, in a letter last week to the House Business and Utilities Committee, said the measure -- included in House Bill 191 and Senate Bill 197 -- is anti-consumer.

According to The Tennessean, under the legislation investor-owned utility companies would be able to up their rates every year without going through the state's current review process.

Right now, utilities must go through a "rate case," a court-like hearing in which they must prove that any price increases are necessary to keep them profitable.

Cooper argues in his letter, according to The Tennessean, that the current review process protects against excessive rate hikes.

The attorney general also notes that utility companies have exaggerated requested rate hikes -- by as much as 60 percent -- in the last 10 years.

"Under the proposed annual rate review mechanism, utility customers who have enjoyed rate stability under the current system can expect yearly rate increases in many cases," wrote Cooper, a Democrat.

According to the newspaper, the legislation covers for-profit utility companies. Their rates are regulated by the Tennessee Regulatory Authority, or TRA.

The measure would not apply to publicly owned utilities or member-owned companies.

Tim Schwarz, chief of external affairs at the TRA, told the newspaper that the agency supports the legislation and contends that consumers still will be protected.

"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."

From Legal Newsline: Reach Jessica Karmasek by email at

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