A bipartisan group of lawmakers derailed a bill Tuesday that would have allowed Tennessee’s three largest natural gas utilities to automatically raise rates each year.
The unlikely coalition of Republicans and Democrats say they’re looking after consumer interests. They put off to next year a bill that would let three natural gas companies get rate increases of 4% a year just by filing paperwork.
East Tennessee Democrat Eddie Yokley led the opposition to the measure.
“We need to be fair to that industry so they can survive. I want to do that, but I don’t want to do it at the cost of the consumers. And I’ll tell you, I’m convinced at this point right now, I feel, you’re going to sock it to the consumers.”
Republicans on the House Commerce Committee joined Yokley in favor of sending the bill to a so-called “summer study committee” by a vote of 18-13.
The committee’s action effectively delays the bill until the 2010 legislative session.
The bill would have affected Piedmont, which owns Nashville Gas; Atmos Energy, which operates in Williamson and Rutherford counties; and Chattanooga Gas.
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The bill is HB 1349 Sargent/ 1375 Johnson.
Eddie Roberson chairs the Tennessee Regulatory Authority. He says he thinks the bill gives the TRA enough authority to maintain control of rates charged to consumers:
“We’re kinda going in uncharted water, here. But I do believe that we have the tools necessary to use discretion to make sure the rates are just and reasonable.”
Roberson says he can’t make guarantees because as a commissioner he must later rule on rate requests. But he says the bill would tend to lead to lower, not higher, rates.
“The risks to the companies go down. And through the traditional rate-making process, when a risk of a company goes down, you lower their rates.”
When Democratic Representative Brenda Gilmore of Nashville asked what would be the maximum returns to the three private companies affected by the bill, Roberson was backed into a corner.
“The maximum increase that would be allowed…in other words, this is the worst case scenario… is: Chattanooga Gas would be able to increase their rates $1.6 million, if they can justify it. Annual. Atmos Energy, $2.4 million, if they can justify it, and Piedmont Gas, $5 million, if they can justify it.”
Gilmore: “Okay, I think what I was asking, though, is there anything in this bill that would reveal to us, what impact that has had on the customer?”
Roberson: “No there’s not.”
Piedmont is the company that owns Nashville Gas. Atmos operates in Williamson and Rutherford counties.
House Commerce Chairman Beth Harwell (R-Nashville) voted to postpone the bill for a year.
“…but the bottom line is, a lot of questions were asked that made the committee members nervous of whether this was going to raise rates on the consumers. And above all, we’re here to protect consumers.”
Yokely, the representative who called for a halt to the bill this year, says he is concerned about financial pressure on average ratepayers in a down economy.
“Nobody, I don’t think, knew in this committee how, what the impact, truthfully, would be on our consumers. And I’m not ready to vote for things I don’t understand. I’m going to try to adhere to that the rest of my career. And try to do the things that we need to do to protect the consumer and yet be fair to our companies.”
The state database shows the vote to send the measure to a summer study committee as a “voice vote – ayes prevail” as of 12:40 p.m., 5/5/09. The 18-13 vote was on a procedural vote to “table” or kill Yokley’s motion. Eighteen members voted against the tabling motion, therefore are presumed to be in favor of Yokley’s deferral for a year.
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