KYLE MURPHYStaff Writer

The Tullahoma Utilities Authority Board of Directors voted to a 20% increase in the wastewater customer charge for both residential and commercial customers, ranging from $2 to $4.

The rate change came before the board during its April 22 meeting as the first item on its agenda. According to TUA President Allen Potter, the proposed adjustment is the result of a thorough review of the utility authority’s internal cost structure and a comparative analysis of customer charges across neighboring utilities. Prior to the board meeting, the rate committee met on April 7 to review and discuss the proposal before giving its support to move forward with the recommendation.

Potter went over with the board what the customer charge will go towards, which included administrative fees, maintaining the system, billing and other fixed costs and tasks associated with maintaining access to the system regardless of wastewater usage and treatment.

“These costs–such as administrative functions, billing, customer service, infrastructure upkeep, and system readiness–are incurred regardless of customer usage,” Potter said via the memo. “As these fixed costs have continued to rise, the current customer charge no longer adequately reflects the true cost of service.”

Potter gave three points of rationale for the increase in the memo. The first rationale was financial stability as the adjustment would ensure more stable revenue recovery to meet ongoing fixed cost obligations; the second rationale was rate fairness as a more accurate customer charge would reduce over-reliance on volume-based charges and promotes equitable cost recovery; and the final rationale was future planning as additional revenue would support necessary capital investments, regulatory compliance and continued system reliability.

During the meeting, Potter said there were two main drivers behind the request. The first one was the utility authority’s budget, but the most important reason is because TUA’s wastewater budget is subject to approval by the Tennessee Comptroller’s Office.

“If you do not show a balanced and positive net income budget every year, you are subject to their probation, which we had found ourselves on two years ago,” Potter said. “That is the main driver of requesting this rate increase this year. So, I’m requesting a $2 customer increase on residential and a $4 on commercial.”

Provided to the board was a table comparing data of TUA’s wastewater customer charge versus neighboring utilities. According to Potter, even after the proposed 20% increase, TUA will remain lower than or competitive with surrounding systems.  

“With the increase, we will still have the lowest customer charge of our neighboring utilities,” Potter said.

Per the data, TUA’s wastewater customer charge for residential, $10 ($12 with increase) was less than Shelbyville’s charge of $16.70, Winchester’s charge of $22.36 and Manchester’s charge of $13.78. As for the wastewater customer charge for commercial, TUA’s charge of $20 ($24 with increase) would be less than Shelbyville’s charge of $25 ($50 for large commercial), but would be a bit more than Winchester’s charge of $22.36. Manchester did not have charge listed for commercial customers.

When opened for discussion, board member Patty Deen said she found it interesting that even with the rate increase, TUA was lower than the surrounding utilities.

“I think that’s really a testament to how well our management is doing,” she said.

Board member Mike Stanton echoed Deen’s comment and highlighted difference among the cities listed in the memo.

With no further discussion, the board unanimously approved the 20% increase in the wastewater customer charge for residential and commercial customers, effective May 1, 2025.