NASHVILLE — The Tennessee Regulatory Authority voted two to one this afternoon to reduce substantially the Tennessee-American Water Co.’s proposed rate increase for Chattanoogans.

Instead of a 21.7 percent percent increase for Chattanooga residential, industrial and commercial users, the increase will be 4.37 percent.

Director Eddie Roberson, who made the motion, said rates for the average Chattanooga residential user would go up by 72 cents a month versus the $3.65 average increase sought by Tennessee-American.

Regulatory authority Chairman Tre’ Hargett joined Director Roberson in voting for the motion, which allows Tennessee-American to earn $1,655,541 above what the company now makes. Director Mary Freeman voted against the motion, arguing the company deserved to make $2,113,622 more.

Tennessee-American, which is owned by American Water Works Co., had sought a $7.6 million increase. The company received a 12.3 percent rate hike just last year.

The ruling will increase rates for Catoosa County and Fort Oglethorpe in Georgia by 4.37 percent. It also directs a 12.77 percent increase in rates for Signal Mountain and Walden’s Ridge at the earliest date allowed under a current contract. That is expected to be in the fall of 2009.

Tennessee-American had not sought the increases in the two communities.

Commercial rates would be reduced by some $75,000 in September 2009 as a result, according to the motion.

For complete details, see tomorrow’s Chattanooga Times Free Press.

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