Comptroller and staff brief subcommittee on Tennessee Board of Utility Regulation, financial distress and water‑loss work

Comptroller Jason Mumpower and Ross Colona, assistant director for utilities in the comptroller's office, briefed the Business & Utilities Subcommittee Wednesday on the Tennessee Board of Utility Regulation's (TBOR) role in overseeing local utilities.

Mumpower said the board's work is driven by concern over the financial condition of small local utilities. "What keeps me up at night is worrying about the financial condition of the myriad of utilities across Tennessee," he said, citing aging systems in rural communities and the life‑and‑death importance of water and wastewater services.

Ross Colona described TBOR's structure and tools. He explained that Public Chapter 463 (2023) merged prior boards into TBOR and extended oversight to municipal, county, authority and certain gas systems. The board includes eleven members drawn from comptroller designees, legislative appointees and governor appointees, and is supported by comptroller staff who split time across other office functions.

Colona said TBOR's main regulatory work centers on financial distress, using audit results, multi‑year operating losses, unrestricted net position deficits and illicit fund transfers as triggers for review. He described the board's common remedy: ordering a third‑party rate study and requiring implementation of the study's recommendations. "If the utility chooses not to [implement rates], we can refer it to the attorney general's office for enforcement," Colona said.

On water loss, Colona said TBOR uses a 40 percent threshold to identify systems for corrective action; he reported a median water loss across Tennessee of roughly 31 percent. "If you fall above that 40% threshold, you refer to the Tennessee Board of Utility Regulation for corrective action to figure out how to deal with the water loss," he said.

Colona also summarized the board's customer‑appeals authority, which allows customers to seek review of a utility's rates, policies, infrastructure requirements and failures to extend service. He described administrative review procedures, the board's capacity to order mergers to cure persistent financial or managerial failures, and ongoing priorities such as proactive regulation, further work on wastewater inflow and infiltration, and encouraging voluntary utility consolidations.

Committee members asked how often the board meets (Colona said three to four times annually), about delinquent audits and whether the comptroller's office can complete audits for local governments, and how TBOR coordinates with environmental and health agencies when wastewater problems pose public‑health risks. Colona said serious public‑health incidents are handled with Department of Environment and Conservation and Department of Health involvement, while TBOR focuses on financial, managerial and technical capacity questions.

Members praised the board's dispute and hearing process as an avenue for customers who felt ignored by local governments. Chair Vaughn said a constituent who pursued a contested case hearing told him, "I finally have feel like someone is listening to me. I am being treated professionally. I am hopeful," reflecting that TBOR inquiries can give residents a formal review path.

Colona and Mumpower said TBOR will continue prioritizing financial‑distress cases, water‑loss regulation, and encouraging utility mergers and consolidations to achieve economies of scale.