MEMPHIS, TN (WMC) - MLGW proposed a massive modernization plan Tuesday that aims to improve reliability over the next five years.
However, that plan comes with proposed rate hikes.
MLGW is asking council members to raise rates across electric, gas, and water divisions effective July 2019.
The average customer cost is about $10 a month.
“I don't want customers, or I don't want anyone to expect that we can make additional improvements absent additional investment,” said MLGW’s new CEO JT Young.
Young told Memphis City Council members Tuesday that they need to make you pay more.
“What happens if we don’t get any relief is the reliability will downgrade,” Young said. “Customer outages will be longer.”
The utility is proposing two sets of rate increases.
The first will go into effect in July 2019, adding roughly $5.47 to a customer's electric bill, $1.78 to a customer's gas bill, and $2.52 to a customer's water bill monthly, a total just shy of $10.
The second set of increases would hit in July 202, affecting all three divisions and adding up to $7 a month.
Young says the rationale is simple. MLGW hasn’t invested what it should in system improvements.
Gas pipes have to be replaced, more water wells need to be drilled to enhance productivity, and a series of power outages this summer shows electrical equipment is too old to hold up.
“We’ve been having the conversation about the outages, we get those complaints,” said City Councilman Worth Morgan.
“I have to look at the whole picture, just got it today, give me some time to think about it,” said City Councilwoman Patrice Robinson.
Separate 2 percent electric and gas rate increases for MLGW were approved earlier this year after months of contentious debate.
It's unclear how this new process will go.
“Infrastructure is something we have neglected in the city of Memphis for quite some time when it comes to MLGW,” said City Council Chair Berlin Boyd.
MLGW's electric system upgrade is a 5-year plan which includes $342 million of modernization.
The utility said it will cut customer outage minutes more than 50 percent by 5 years.
This was heard for the first time in committee Tuesday, and we can expect more debate in the weeks to come.