Tag Archives: utilities

Ramsey appoints Hill to new 6-year term at TRA

Kenneth C. Hill of Blountville, first appointed a director of the Tennessee Regulatory Authority in 2009, has been named to another six-year term by Senate Speaker Ron Ramsey.

Hill, father of state Reps. Mathew Hill and Timothy Hill, House and Senate resolutions confirming the appointment of Hill, is a past chairman of the utility oversight agency.

Resolutions confirming Hill’s appointment (SJR693 and HJR758 await approval by the Legislature on Wednesday, expected to be the final day of the 2016 session.

Tax break for electric utilities faces court fight

A Tennessee law granting state rural electric cooperatives a four-year property tax break on new investments, which has gone unnoticed for decades, is now likely to to face a court battle over its constitutionality, reports the Times-Free Press.

The State Board of Equalization, which hears property tax disputes, last week ruled against recent efforts by five nonprofit electric cooperative membership corporations to use the temporary exemption.

As near as anyone can figure, the provision became part of the state law on the co-ops back in a 1945 change to a 1939 law. But co-ops say they didn’t discover its existence until recently.

The board members’ decision was based on an October legal opinion issued by Tennessee Attorney General Herbert Slatery. The state’s chief lawyer said the provision violated the state Constitution, noted Hamilton County Property Assessor Bill Bennett, vice chairman of the equalization panel.

“They can still go on ahead and appeal it,” Bennett said of the co-ops, which distribute power to many rural areas of the state.

Kelsie Jones, the state board’s executive secretary, said the panel “decided to follow the advice of its attorney [Slatery] and direct the Office of State Assessed Properties to revise those assessments to remove the effect of the four-year exemption currently presently authorized by statute.”

He said the “practical effect is the assessments will go up for those companies, subject to their further legal action.”

Mike Knotts, director of government affairs for the Tennessee Electric Cooperative Association, said the co-ops intend to go to Davidson County Chancery Court for a resolution to the issue.

“We disagree with the decision that the board made as a matter of law but are happy that there is an avenue of judicial review to look at it further,” Knotts said.

He indicated that the attorney general’s opinion is just that, an opinion.

“We contend that only the courts have the ability to interpret what is constitutional and what is not,” Knotts said. “The board decided to do something different.”

Natural gas company reduces rate increase under deal with AG

News release from Attorney General’s office:
Tennessee Attorney General Herbert H. Slatery III today announced a settlement with Atmos Energy Corporation (Atmos) that significantly reduces a proposed rate increase to natural gas consumers. The settlement provides that consumers’ rates will only increase 0.5%, which is substantially less than the 3.9% rate increase Atmos originally requested.

“This agreement accomplishes two very important things. It keeps rates down for consumers while allowing Atmos revenues sufficient to earn a fair and reasonable return on its capital investments,” said Attorney General Slatery.

Atmos initially asked the Tennessee Regulatory Authority (TRA) to raise consumers’ rates by approximately $5.89 million. This would have increased the natural gas bill for the average residential consumer by $2.09 per month. Instead, the settlement will sharply reduce this increase to approximately $711,000. The net result is that the average residential consumer will only see an estimated 26 cents per month increase.

The Consumer Advocate and Protection Division of the Tennessee Attorney General’s Office represents the interests of Tennessee consumers of public utilities services. In this case, the Consumer Advocate intervened on behalf of ratepayers to negotiate the agreement.

The settlement also limits the rate of return on equity that Atmos may earn on its capital investments. Atmos had requested a 10.7% return on equity, but the settlement permits a maximum return on equity of 9.8%. This lower return will help keep consumers’ natural gas rates low into the future.

Atmos is a public utility that provides natural gas service to approximately 132,000 residential, commercial, and industrial consumers in Tennessee. Atmos serves Bedford, Blount, Carter, Greene, Hamblen, Maury, Moore, Obion, Rutherford, Sullivan, and Williamson Counties.

The new rates will go into effect on June 1, 2015.

Seven Memphis electric meter readers fired for falsle billings

Seven Memphis Light Gas and Water Division employees were terminated after an investigation determined they falsified meter readings, impacting more than 3,000 customers, reports the Commercial Appeal.

Jerry Collins, the division’s president and chief executive officer, said Friday that an additional employee was suspended indefinitely as part of the investigation that began in May. Further disciplinary action is expected in the investigation, according to MLGW.

“Recently-installed smart meters led to the detection of false readings,” MLGW said in a statement.

But Rick Thompson, business manager for the International Brotherhood of Electrical Workers Local 1288, said the union is appealing the terminations and blamed the utility’s action on a conspiracy to promote smart meters — the controversial system that could lead to replacing meter readers.

Some of the questionable entries resulted in higher bills and some were lower, Collins said.

“One meter reader entered approximately 15,000 inaccurate meter reads without reading the meter,” Collins said, adding he was not aware of any criminal investigation into the actions.

Thompson said the union disputes the accusations and has filed a grievance on the terminated workers’ behalf.

“We don’t see any evidence of what they’re talking about,” Thompson said. “We think it’s a conspiracy to bring in smart meters. They are trying to create a public mistrust of meter readers so they can try to bring in smart meters.”

Chattanooga power board hit with $10M lawsuit claiming false billing

A judge has unsealed a $10 million whistle-blower lawsuit filed against Chattanooga’s Electric Power Board that alleges the utility made false claims on its billing records for 20 years, reports the Times-Free Press.

Plaintiff Don Lepard alleged he discovered an estimated $5.9 million in billing discrepancies when Chattanooga officials contracted with him in 2011 to replace streetlights, but the suit said his warnings to both parties fell on deaf ears.

Instead of settling the matter with the city, EPB instead began making covert changes to its billing procedures and attempted to discredit Lepard, he alleged.

“Here’s what got them caught: greed,” Lepard said.

EPB president and CEO Harold DePriest declined Friday to comment specifically on Lepard’s claims.

EPB has admitted that it charged the city for thousands of older, high-wattage lights that were no longer on the poles, and which in many cases had been replaced by more energy-efficient lights. But the utility has steadfastly maintained that these overcharges were balanced out by other mistakes and costs.

…Lepard’s lawsuit falls under Tennessee’s whistleblower law, which allows individuals to bring lawsuits on behalf of cities or the state, with a large portion of the damages being returned to taxpayers. The city may opt not to take the lead in such a lawsuit, instead allowing co-plaintiffs like Lepard to pursue the case.

City Attorney Wade Hinton said Mayor Andy Berke and the City Council elected not to join Lepard’s lawsuit because a small group of the mayor’s top staff is privately pressing EPB on its overcharges and to avoid paying attorney fees. But Hinton reserved the right to intervene “if the discussions with EPB are not fruitful.”

If his suit is successful, Lepard could receive between 25 percent and 50 percent of any damages awarded under the statute governing whistle-blower lawsuits.

Some Utility Officials Running Up Big Tabs on Ratepayers

From reporter Josh Flory:
In recent months, the News Sentinel sought travel records from local utility districts across East Tennessee and examined piles of receipts along the way. Many of them were for mundane purposes — meals at Cracker Barrel, registrations for conferences and the like.
But at some districts the records showed a willingness by employees or board members to spend ratepayers’ money on more extravagant expenses. Three local districts have either altered their travel policies or eliminated certain spending practices in recent months.

Listed expenses in the article include dinner for 18 at the Peddler in Gatlinburg for $886.99, dinner for seven at the Stock Yard in Nashville for  $430.20 and dinner for six at the Palm in Nashville for $458.93.
…The (South Blount Utility) district has adjusted its policies on travel within the last year. In an interview this month, District Manager Henry Durant said that last November TAUD (Tennessee Association of Utility Districts) held a school for commissioners, and that was when South Blount learned it was not appropriate for a district to cover meal costs for spouses who are traveling with district commissioners or employees. He said South Blount stopped that practice at the end of last year.
“We didn’t really understand that there was a problem with that,” Durant said.
Durant said that because of the News Sentinel’s inquiry, South Blount decided to seek restitution for certain expenses incurred by spouses, although he said the amount of money won’t exceed $200 or $300.
In addition, Durant said that at a recent board meeting, the district adopted a travel policy to establish a per diem expense rate for employee travel. The manager said the district thought it had a travel policy, but realized recently that it did not.

Comptroller: City of South Pittsburg Improperly Took $750K From Utilities

News release from state comptroller’s office:
The City of South Pittsburg improperly took almost $750,000 from its local utility department, an investigation by the Comptroller’s Division of Municipal Audit has revealed.
The improper fund transfer occurred after the city’s mayor misinterpreted a 21-year-old city ordinance.
The ordinance, adopted in 1990, was intended to provide assurances that the local utilities, Marion Natural Gas System and the Board of Water Works and Sewers, would pay for any roadwork expenses related to utility line installation, repair or maintenance. To make sure all costs were covered, the ordinance gave the utilities the option of placing a $20,000 annual deposit for all projects that might occur in a given year.
The utilities paid a $20,000 deposit in 1990. However, in a letter dated Dec. 31, 2009, South Pittsburg’s mayor asserted that the utilities should have been paying $20,000 deposits every year, even though they had paid for their roadwork expenses and the original $20,000 deposit remained intact.
In a letter sent today, Dennis Dycus, director of the Division of Municipal Audit, advised city officials to take corrective action to repay the money owed to the utility districts. As provided by state law, city officials who fail to reimburse the utility can be subject to ouster from office.
To view the letter online, click HERE.

Haslam: Should TRA Be Abolished?

Gov. Bill Haslam raised the possibility of abolishing the Tennessee Regulatory Authority in the future and acknowledged that he ran into problems with Republican legislators by trying to name a Democrat to TRA earlier this year.
“Should there be a TRA, given the change in regulatory function?” Haslam asked in an interview with the Chattanooga Times Free Press. “If so, what size should it be?”
He suggested that functions of the agency, an independent entity with directors appointed by the General Assembly and governor, might better be folded into the executive branch. The TRA, which wields both judicial and executive powers, oversees rates for some investor-owned telephone utilities as well as for investor-owned water, natural gas and electric utilities (though most former functions in regulating telecommunications companies were eliminated in 2009).
…TRA Chairwoman Mary Freeman said there’s “definitely a role” for the TRA.
“You have 49 other states that have public service commissions, and though we serve different areas, I think it’s a necessity,” she said.
Freeman said the TRA’s mission is regulating monopolies or near-monopolies and “trying to find that balance with the consumers.”
The agency has about 70 employees, including directors, attorneys and experts in utility operations and rates. In addition to its regulatory duties, the agency fields consumer complaints, conducts gas pipeline safety inspections, runs Lifeline linkup programs and operates telephone discount programs for the needy.
…McCormick said state lawmakers took issue with Haslam over his plan to appoint a Democratic supporter, Andrew Fowlkes (of Memphis), as a TRA director.
He said the idea of appointing Fowlkes, who is black, to meet diversity goals drew “some negative feedback” because Republicans believed a black Republican could be found to replace Freeman, who also is black.
“I’m sure he [Fowlkes] is a great guy … but he’s a Democrat, and I think a lot of our members didn’t feel comfortable supporting him for that position,” McCormick said.
Speaking to the Times Free Press, Haslam acknowledged GOP lawmakers’ opposition.
“Yeah, well, to be frank, there was some concern there,” Haslam said of the nomination, which ultimately was dropped. Fowlkes could not be reached for comment.
Haslam’s administration also dropped a push to cut the number of TRA directors from four to three as a cost-saving measure.
Freeman and Roberson, both Democrats whose terms are to end July 1, are expected to serve until replaced or a position is abolished.
When pressed whether regulation is needed, Haslam conceded that many companies overseen by the TRA are monopolies not subject to a competitive market.
“Maybe there is a need,” he said. “I don’t know enough to make a final call yet. Or maybe an existing state department can do it. We have state departments that oversee a lot of things.”