A Regulatory Compact

  • As an investor-owned public utility, the company has an OBLIGATION to provide water service to its customers.
  • In exchange for being obligated to provide service, the company is entitled to charge fair and reasonable rates.
  • What is fair and reasonable has been defined by the U.S. Supreme Court.
  • All water utilities, investor-owned and government owned, are considered monopolies due to the significant cost for a competitor to install a separate water system. For investor-owned utilities, the lack of competition is offset with regulation by a unit of state government (Tennessee Regulatory Authority, TRA), which regulates rates, service quality, and the amount of return an investor is allowed the opportunity to earn.
  • Investors are not guaranteed a return. Rather, the TRA determines the rate of return an investor is allowed an opportunity to earn.
  • We are regulated by the TRA regarding rates and service quality, in addition to the US EPA and the Tennessee Department of Environment and Conservation (TDEC). 

Download the Rate Case Process and Regulatory Compact PDF