$40M in cuts made to MLGW operations budget

$40M in cuts made to MLGW operations budget

MEMPHIS, TN (WMC) - At Tuesday’s city council meeting, MLGW leaders detailed $40 million dollars’ worth of cuts they’ve made to their operations budget.

This comes after Memphis City Council members declined to raise gas and electric rates in February after months of debate.

That $40 million figure doesn't include roughly $151 million in capital improvements aimed at reducing customer outage minutes that continue to climb.

There's also new data from MLGW to back up that the problem won't improve.

“Candidly right now, I'm just praying for a relatively storm free summer,” said MLGW President and CEO J.T. Young.

Young says a stormy summer means you’ll stay in the dark longer.

Tuesday the utility brought Memphis City Council members a graph showing customer outage minutes have dramatically increased since 2014.

(WMC Action News 5)

The culprit, the utility says, is aging infrastructure.

“What we’re planning to do is a proactive approach, what we were relegated to, is to be reactive,” Young said.

Council members voted down rate increases earlier this year amid concerns about passing on costs to customers.

MLGW as a result had to trim $40.9 million from its operation and maintenance budget, which included $2.6 million in new positions along with a hiring frost, a $7.7 million overtime cut, and a reduction in tree trimming and environmental spending.

MLGW also cut its capital budget by $151 million, mostly in the electric division.

The utility wanted to spend money there on replacing substation equipment along with poles and transitioning to automation, which Young says would have restored power faster.

“Going forward without giving us attention and being proactive it isn’t going to get any better,” Young said.

The utility also brought a map at the request of council member Martavius Jones, showing areas where power goes off the most.

(WMC Action News 5)

Customers in the red stay in the dark roughly four times longer than customers in the green. The red areas include Whitehaven, Parkway Village to the south and Frayser and Raleigh to the north, as well as Millington and Arlington.

“Instead of making emotional decisions, let’s make data-driven decisions,” Jones said.

It's likely the utility tries to talk rate increases when it starts its budget process again late next summer.

Keep in mind the municipal election is in October, which includes city council seats, so there could be some new faces taking part in this discussion.

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