Tennessee utility board rescinds July order on South Fork-Bristol Bluff merger, keeps oversight open

The Tennessee Board of Utility Regulation voted 7-2 on a special-call meeting to rescind an order from its July meeting that would have guided a merger between the South Fork Utility District and the Bristol Bluff City Utility District. Board staff recommended rescission after South Fork’s general manager, Adam Hale, left his position and South Fork informed the board it would contest the order.

Board staff said rescinding the order does not close the administrative case and that the board will retain oversight of South Fork while monitoring the district’s operations. K. Ross, board staff, told members, “we are requesting and recommending that the board vote to rescind the order from our July meeting.”

Why it matters: The July order had described operational details of a potential merger and included a projected 5% customer cost savings contingent on the merger. Board members said the departure of the manager who led South Fork’s recent financial turnaround changed the circumstances that had informed the earlier order but did not eliminate the board’s concerns about managerial or financial problems that first prompted review.

Board staff and members described the case history: South Fork was formed from a prior merger of financially distressed utilities and became the subject of an investigation by the Comptroller of the Treasury’s Division of Investigations. That inquiry and subsequent findings led the board to open an administrative review for financial distress and to remove several commissioners previously. Board staff said those prior managerial deficiencies and financial irregularities were what initially brought the utility to the board’s attention.

Board members asked whether South Fork had formalized any reason for contesting the July order; Ross said the district had not provided a formal resolution explaining the challenge but provided meeting minutes showing an intent to contest. Ross said staff asked South Fork to adopt a formal resolution stating its reasons but that one was not provided. Board counsel noted that if the board did not rescind, South Fork could challenge the order in court within 60 days and that the Attorney General’s Office would represent the board in such litigation.

Several members pressed staff about the risk that rescinding the order could encourage other utilities to delay compliance by improving short-term appearances and thereby avoid an ordered merger. Board members also emphasized that rescinding the order does not remove board scrutiny. Ross said the board would continue to monitor South Fork’s financial and operational performance and could return to the matter if conditions warrant. Ross noted specifically that South Fork could not implement the 5% rate decrease without prior TBOR approval because the decrease had been contingent on the merger.

After discussion, Miss Vanestel moved to rescind the July order; Mr. Hampton seconded. The roll-call vote recorded seven ayes and two nays: Ayes—Chairman Moody; Vice Chair Mitchell; Mr. Stone; Mr. Smith; Miss Vanestel; Mr. Hampton; Mr. Dye. Nays—Mr. Giles; Mr. Pelham. The motion passed, rescinding the July order while leaving the case open.

Board members discussed next steps. Some members proposed requiring periodic reports from South Fork (quarterly updates through March, June, September and December 2026), but counsel and staff noted this was a special-call meeting limited to the merger topic and recommended any longer-ranging reporting requirement be considered at the next regular meeting. The board did not adopt a formal reporting schedule in this session but said South Fork will be on the agenda for future consideration and that staff will continue oversight.

The vote rescinded the merger order but did not close the administrative review; the board said it will continue to scrutinize South Fork’s management, capital plans and operations and could revisit enforcement or merger options if South Fork returns to financial distress or shows managerial failures such as frequent service interruptions or failure to address infrastructure or compliance issues.

The board adjourned after the vote and scheduled further consideration of South Fork for an upcoming meeting in December.