Board Orders
If your utility has been referred to the Tennessee Board of Utility Regulation and has subsequently received an order, then the material provided below may assist you in the process. If you are unable to find a copy of the order that was sent to your utility, please go here to find your outstanding order.
If you have been issued an order but do not have record of it or if you have questions regarding compliance with the order, please contact utilities@cot.tn.gov or your analyst if you have any question.
Financial Distress:
Financial Distress is defined within the Tennessee Code as either; two consecutive years of negative statutory change in net position, defaulting on debt obligations, or having a net deficit. A utility system will be referred to the TBOUR on one of these bases once the most recent audit has been reviewed by Board staff.
- You will receive a notification of the referral, as well as a request to complete a Financial Distress Questionnaire. If you have been referred but did not receive a link or do not have access to the original email, please go here to fill out your financial distress questionnaire. While our office recognizes that this questionnaire may be difficult to fill out, it is necessary to determine how we can help you achieve long-term financial success. If you are having trouble filling this out, please contact your utility analyst for additional assistance.
- Once the Board has received the utilities questionnaire and Staff's recommendations, an order will be issued directing the utility to take specific actions. Usually a Financial Distress Order will require the entity to contract with a third party and receive a rate study along with an evaluation and modification of policies. If you are unsure about whether a company or group is approved by the Comptroller of the Treasury to conduct a rate study please reach out to your utilities analyst prior to signing any agreement or contract.
- Once your utility has received the ordered rate study the board will need to adopt all recommendations made by the approved expert. Once the utility has completed two consecutive, timely audits showing a positive change in net position and completed all outstanding orders, the entity will be marked for release under staff and board guidance.
Water Loss:
Excessive Water Loss in Tennessee has been defined as any system with non-revenue water above 40%, in accordance with Tennessee Code Annotated § 7-82-702. Currently water loss is reported as part of the Annual Information Report, which is required to be submitted by the end of every fiscal year. A utility system will be referred to the TBOUR on this basis once the most recent annual information report has been reviewed by Board staff.
- Once Board Staff has reviewed the Annual Information Report submitted by the entity and found that the utility exceeds the 40% non-revenue requirement, a notification of the referral along with a request to complete the AWWA v6.0 by a third party expert will be sent to the utility.
- Once Board staff has received the AWWA worksheet, an request will be issued directing the utility to take specific actions. Usually an Excessive Water Loss order will require the entity to create a management plan to bring the utility back within water loss compliance. Utilities may choose to work with a third party group to conduct a leak study or plan necessary capital improvements to reduce total non-revenue water. Zone metering is also an often effective process to detect and resolve leaks that are occurring in specific sections of a utilities infrastructure. It is important to note that there is no set solution or pre-approved plan by the board, as all utility systems are unique and should be examined individually by all relevant parties. If the utility fails to comply with Board staff on either item one or two, the entity will be referred to the board for noncompliance.
- Once your utility has completed all outstanding orders and has shown improvement in reducing non-revenue water, Board staff will have the authority to close the case without further action from the Board. Any actions taken by the TBOUR will require an additional order to close the case.
Administrative Review:
Pursuant to TCA § 7-82-706, the Tennessee Board of Utility Regulation is granted the authority to conduct a review of any utility system under its jurisdiction to determine the system's financial, technical, and managerial capacity to comply with the requirements of federal and state law or to efficiently mange its system, rates, debt structure, and water loss.
Subsequently the TBOUR is given the authority to require a utility system take appropriate remedial action to correct a deficiency identified during the review process. These remedial actions may include:
- Changes in ownership, management, accounting practices, or user rates;
- The adoption or change of practices, software, or hardware.
- The development of alternative methods of system management or supply and distribution of resources.
- Merger or consolidation of a utility system;
- Development of rules and policies as necessary for effective and responsible management of a utility system.