Tag Archives: rates

AG: Haslam Bill Makes It Easier for Utilities to Raise Rates

Attorney General Bob Cooper’s office warned Wednesday that Gov. Bill Haslam’s plan to streamline rate setting for utilities shifts their “business risks” onto households and businesses, effectively making them guarantee the monopolies’ profits, reports Andy Sher.
“What this does in our opinion is make it more likely that rates will increase for business and households,” Assistant Attorney General Vance Broemel told House Business and Utilities Committee members Wednesday.
Broemel is the chief attorney in the attorney general’s Consumer Advocate Division, which often intervenes in rate hearings on increases sought by utilities.
But Tennessee Regulatory Chairman Jim Allison sought to assure lawmakers, saying similar changes have been put into place in states like Georgia. Tens of thousands of customers served by companies like Tennessee American Water and Chattanooga Gas need not be fearful, he said.
“The attorney general is focused in a very narrow sense on the rate of return” for utilities, Allison said. “But what they’ve missed is before TRA will allow anyone to enter into one of these, we have to go into a process to establish that this is in the public interest.”
The panel approved the administration bill, sponsored by House Majority Leader Gerald McCormick, R-Chattanooga, on a voice vote.
Haslam’s bill, developed in conjunction with the governor’s recently reshaped TRA, creates a new regulatory framework for dozens of investor-owned utilities.
It won’t apply to public power distributors or AT&T and some other telecommunications companies under “market regulation.” The bill also cuts regulatory fees paid to the state by some companies, including AT&T, while increasing them for others like the water and gas utilities.
Lowered fees will reduce TRA’s revenues for operations by an estimated $1.1 million annually and result in staff reductions, according to a fiscal note on the bill.
The bill creates “alternative regulatory” methods that can be used instead of full-blown rate hearings utilities now must go through. But it keeps such hearings for utilities that wish to continue them.

See also The Tennessean report. An excerpt:
In his Tuesday letter to the House Business and Utilities Committee, the attorney general said the bill would effectively shift the utilities’ “business risks to Tennessee households and businesses,” ensuring that the companies make “monopoly profits” regardless of how well they are managed.
“Furthermore, 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,” Cooper wrote.
Despite Cooper’s warning, the bill was cleared by the committee Wednesday on a voice vote and was sent to the House Finance Committee. The companion Senate bill has yet to see any movement, the attorney general’s office said Thursday

Panel Recommends Cut in Worker’s Comp Premiums

A unanimous recommendation from a state advisory council Thursday could translate into a 5.1 percent overall reduction in average charges for workers’ compensation insurance premiums for Tennessee businesses, reports The Tennessean.
The recommendation now goes to the state’s insurance commissioner, whose approval is required for any rate change. If approved, it could go into effect Aug. 9, when a 60-day stay expires that a joint committee of the state legislature had put on a 11 percent reduction in the so-called medical fee schedule under which physicians, hospitals and others are paid.

TVA Rates to Dip in October

KNOXVILLE, Tenn. (AP) — Tennessee Valley Authority ratepayers in October will get a break from lower fuel costs, with average residential bills expected to drop by as much as $3.50.
Despite a 2 percent increase in the utility’s base rate starting next month, a TVA statement Monday said a projected reduction in demand for power and coal-fired generation will actually reduce customer bills.
Compared with September, the combined effects of the higher base rate and the decrease in total monthly fuel costs will mean an average decrease of $1.50 to $3.50, depending on usage.
The statement said average wholesale rates in October will be lower than they have been since June.
TVA supplies power to about 9 million people in Tennessee, Kentucky, Alabama, Mississippi, Georgia, North Carolina and Virginia

TVA Raises Rates, Gives Go Ahead to Completing Nuke Plant

KNOXVILLE, Tenn. (AP) — Tennessee Valley Authority board members have approved 2 percent average wholesale rate increase that takes effect Oct. 1 and voted unanimously to finish construction of a 37-year-old nuclear plant in northeast Alabama.
The decisions came during a Thursday meeting at TVA headquarters in Knoxville after board members heard public comments about the nuclear plant. The rate increase comes to an extra $1.60 per month.
TVA President and CEO Tom Kilgore has said that building the Bellefonte reactor is the right move for the environment and for the utility’s 9 million rate payers in Tennessee, Kentucky, Virginia, Alabama, Georgia, North Carolina and Mississippi.
Finishing the mothballed plant is projected to cost $4 billion to $5 billion, on top of about $4 billion already spent.

‘Payday Loan’ Bill Approved By Senate

The Senate voted 25-6 Monday to revise the interest rate and fees for so-called “payday loans” over the protests of some Democrats.
Sponsor Sen. Bill Ketron, R-Murfreesboro, said that SB1557, as amended, benefits borrowers overall by effectively increasing the amount they can borrow, from $200 to $500, and allowing only a single $30 charge for a bad check.
The bill also requires that those making payday loans over the Internet have a presence in Tennessee and be regulated by state officials.
Democratic senators, including Sens. Douglas Henry of Nashville, Andy Berke of Chattanooga, said the bill effectively authorizes an interest rate of 360 percent.
“I know that’s a large amount of interest to pay, but when you do it in small amounts, you almost have to,” said Ketron.
Berke said it may be true that it is expensive to handle small loans, “But if that’s the case, perhaps we should consider that they don’t need to be in business.”
The bill is scheduled for a House floor vote Wednesday.

Telephone Access Fee Bill Approved by Senate

The Senate approved 26-6 Thursday legislation projected to save large telecommunications companies $16 million in access fees they now pay to small telephone exchanges and companies.
The bill, SB598, now goes to the House, where approval is also expected now that the opposing sides have agreed to a compromise. Senate Majority Leader Mark Norris, R-Collierville, proclaimed the bill “consumer friendly” and “part of a long period of transition arising out of deregulation” of the telecommunications industry.
Those voting no were senators who have small telephone companies in their districts that will see a shift of funds they now receive to the bigger companies. The bill will reduce the access fee from an average of seven cents per minute to two cents per minute.
As introduced, the four-year phasing in of reductions would have begun immediately. The compromise version puts off the start of the phase-in until April 1, 2012, which Norris said would give the small companies a longer “glide path” to adjust for the decreased revenue.
Sen. Charlotte Burks, D-Monterey, one of those voting no, said AT&T, a leading proponent of the bill, refused to guarantee that the savings would go to benefit customers.
“We’re punishing our rural ratepayers. Their phone bills are going to go up, some of them by $10 a month,” she said.