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Regulatory Authority REGULATORY AUTHORITY 2009-2010 Annual Report TENNESSEE REGULATORY AUTHORITY 460 James Robertson Parkway Nashville, Tennessee 37243-0505 Mary W. Freeman, Chairman Eddie Roberson, Director Kenneth C. Hill, Director Sara Kyle, Director January 24, 2011 The Honorable Bill Haslam Governor, State of Tennessee The Honorable Ron Ramsey Lieutenant Governor The Honorable Beth Harwell Speaker of the House of Representatives Members of the General Assembly: It is with great pleasure that we present to you the Annual Report of the Tennessee Regulatory Authority for Fiscal Year 2009-2010. This report has been prepared in accordance with Tennessee Code Annotated § 65-1-111. The Authority works fervently to ensure that fair market competition is fostered and that all stakeholders are participating on an equal playing field in the private utility sector. Respectfully submitted, Mary W. Freeman, Chairman Eddie Roberson, Director Kenneth C. Hill, Director Sara Kyle, Director Table of Contents Message from the Chairman ..............................................................................................................1 Authority Overview Introduction to Tennessee Regulatory Authority....................................................................3 Authority Organizational Chart...............................................................................................7 Utilities under the Authority’s Jurisdiction.............................................................................8 Office of the Chairman Budget Summary...................................................................................................................10 Revenue.................................................................................................................................11 Docket Room and Authority Activity...................................................................................12 Consumer Services Division............................................................................................................13 Economic Analysis and Policy Division..........................................................................................19 Gas Pipeline Safety Division ...........................................................................................................20 Information Technology Division....................................................................................................23 Legal Division..................................................................................................................................24 Utilities Division..............................................................................................................................28 ii Message from the Chairman It is my sincere pleasure to present to you the annual report of the Tennessee Regulatory Authority for the fiscal year 2009-2010. This year’s report details the Authority’s activities and highlights some of our accomplishments from the fiscal year that ended on June 30, 2010. The Tennessee Regulatory Authority has jurisdiction over privately-owned utilities including electric, telephone, water and wastewater, natural gas and methane gas. Our agency is responsible for promoting the public interest by balancing the interests of utility consumers and providers while facilitating the transition to a more competitive environment. There have been many changes in the areas of telecommunications and the Authority seeks to ensure that Tennessee consumers are protected in this new age of market regulation. It is the goal of this agency to try to help any consumer who presents the agency with a complaint, and in addition, we have implemented procedures to increase enforcement of state law and the Authority rules. Changes abound in other areas of public utility regulation as well. There has been an increase in dockets filed seeking rate increases, and companies are attempting to implement new strategies to meet their need for revenue while encouraging consumer energy conservation. Our talented staff works hard to analyze the information presented and to assist in designing creative solutions that are fair to both the utilities and the consumers. The agency is also developing its own initiatives to educate consumers regarding energy conservation and seeking new strategies that will actually encourage consumers to conserve. The Tennessee Regulatory Authority is pleased to report that its Do Not Call and Do Not Fax programs continue to flourish. Our staff performs various outreach activities to educate consumers about the agency’s programs, such as the Telecommunications Devices Access Program (TDAP), CapTel and Lifeline and Link-Up programs, which assist low income consumers and those with disabilities. The Authority is also very proud of the efforts of the Gas Pipeline Safety division. Our inspectors visit operators across the state and conduct intensive inspections of the gas pipeline. The agency has always placed great importance on this function and from what we have learned from the explosions in other states, we will continue to be diligent in this respect. With my appointment in 2008, I was honored to become the first African-American female to serve as a Director of the Tennessee Regulatory Authority. I take my duties very seriously, and I have strived to promote the public interest by protecting the rights of Tennessee consumers and to provide regulatory oversight of investor-owned utilities. The Tennessee Regulatory Authority understands the importance of the work it does and the vital role it plays in the state. With the support of the Tennessee General Assembly, the Authority is empowered to ensure that both consumers and regulated utilities are provided with an environment conducive to high quality service and competitiveness. We look forward to continuing to work with you to serve the great State of Tennessee. Please contact me at any time if I can assist you or your colleagues. With Warmest Regards, Mary W. Freeman 1 Authority Overview The directors are: Chairman Mary W. Freeman, Eddie Roberson, Sara Kyle, and Kenneth C. Hill. Introduction The Tennessee Regulatory Authority (the Authority), a governing body to regulate utilities in Tennessee was created in 1996. The Authority’s mission is to promote the public interest by balancing the interests of utility consumers and providers while facilitating the transition to a more competitive environment. The Directors of the TRA are appointed by the Governor, Lt. Governor, and Speaker of the House. At the beginning of each fiscal year, the TRA Directors elect a new Chairperson. Director Mary W. Freeman is the 2010/2011 Chairman. Chairman Freeman is the joint appointee of the Governor, Lt. Governor, and House Speaker. Chairman Freeman is joined by fellow Directors Sara Kyle, appointee of House Speaker Emeritus Jimmy Naifeh, Eddie Roberson, appointee of Governor Phil Bredesen, and Kenneth C. Hill, appointee of Lt. Governor Ron Ramsey. 3 Directors Mary W. Freeman Dr. Eddie Roberson Mary W. Freeman was elected by Eddie Roberson was born in her fellow Directors to serve as 1952 in Nashville. Raised in the Chairman of the Tennessee home of a minister, his family Regulatory Authority at an was transferred to Chattanooga Authority Conference held on June in 1960. He attended 21, 2010. A joint appointment of Chattanooga public schools Governor Phil Bredesen, Lieutenant graduating from Chattanooga Governor Ron Ramsey and Speaker High School in 1971. He of the House Jimmy Naifeh, graduated from University of Chairman Freeman began her three-year term as a Director on Tennessee with a bachelors and master degrees. He received July 1, 2008. With her appointment, she became the first African- a Ph.D. in Public Administration from The Institute of American woman to serve as Director of the TRA. Government at Tennessee State University in 1998. He is also a Rule 31 Mediator. While in Chattanooga, he was Chairman Freeman has over fifteen years of legislative and policy elected twice to the Chattanooga School Board and served experience in state government. Prior to her appointment to the as President of the Chattanooga Sertoma Club in 1988. TRA, she served as legislative director for Governor Phil Bredesen where she assisted the Governor and the Senior Policy Dr. Roberson was hired by the Public Service Commission Advisor for Legislative Affairs in developing the Administration’s (PSC), the predecessor to the Tennessee Regulatory legislative agenda. Chairman Freeman served as executive Authority, in 1975. He was appointed as Chief of Consumer assistant to State Representative Lois DeBerry, Speaker Pro Services Division of the PSC and transferred to Nashville in Tempore of the Tennessee House of Representatives prior to 1989. He also served as the agency's executive director from joining the Bredesen Administration. 1995 to 1996. He was appointed by Governor Phil Bredesen in 2006 as director to the TRA and reappointed in 2008. He A Memphis native, Chairman Freeman was born in 1966 and is served as agency chairman in 2007-2009. While at the the daughter of Grace Freeman and the late Wiley Freeman. She TRA, he has been instrumental in encouraging the regulated graduated from Central High School and holds a bachelor’s degree energy utilities to implement energy conservation programs in Speech Communications from Tennessee State University. for its customers. Chairman Freeman is a member of the National Association of Dr. Roberson is active in the National Association
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