More frequent outages after rate increase denial, MLGW warns

MLGW planning counter-budget proposal

MEMPHIS, TN (WMC) - Memphis city council vetoed a proposal that would have raised MLGW rates.

MLGW CEO J.T. Young said the increases are needed to generate enough money to repair and update MLGW’s outdated, constantly failing grid.

MLGW asked council members to raise rates across electric, gas and water division effective July 2019. The average customer cost would have been about $10 per month.

Young said without the rate increases, there will be no infrastructure improvements, which means more outages could happen, including when there's no bad weather.

The council told MLGW to operate under last year's budget instead and sent MLGW back to come up with an adjusted budget for 2019.

Young was disappointed in the veto.

"We'll just do what we can to Band-Aid the system and hope and pray that things don't get too bad," he said. "We'll do what we got to do to make sure things stay together as best we can."

Young went on to say that MLGW layoffs aren’t out of the question if the utility has to cut costs, but right now he says the utility has no plans to do so.

More outages, layoffs possible after rate increase denial, MLGW warns

Young said he will likely go back before the council with a counter-proposal to convince those council members who did not support the proposal of the value of the rate hikes.

Young said with no new cash, don’t expect your service to get better anytime soon.

Memphians Desiree Anderson and Pat Brown said they support the council voting against a pair of water, gas, and electric rate increases in 2019 and 2021.

“They already get enough money to improve those things,” Anderson said.

“If they could cut corners somewhere else, great, but right now our utility bills are high enough,” Brown said.

Young, however, has a very different opinion.

“I just know that when you talk about pumping stations that are 60 years old, equipment that’s four to five decades old that you’re depending on to provide reliable service, at any point in time, something could happen,” Young said.

Young said without new money the old power grid won't improve, and that means after a storm, you'll be in the dark longer.

The proposed budget included a five-year $342 million electric grid modernization plan.

“It’s our projection that outage minutes will not get better on their own,” Young said. “They’re not going to get better because the equipment is not going to get any better unless we actually make the investments to improve those situations.”

Council member Kemp Conrad was one the people who voted against the rate hikes and suggested MLGW take a look at benefit cuts.

“Work 10 years, go work somewhere else and get healthcare regardless of how good the insurance is there,” Conrad said.

The MLGW denial was one small part of an extraordinary meeting where the council failed to make appointments to three open seats, kicking the tasks into the new year.

The tension was so high that at one point, Council Chair Berlin Boyd said this to someone who cursed at him from the audience: “Sir, do not curse in this chamber, just like yo mama, how about that?”

WATCH: Tuesday's Memphis City Council meeting gets heated

Boyd apologized minutes later after making that comment.

Young said they will come back to the council with a counter proposal, but it's not clear when.

WMC5 reached out to MLGW for a timeline but has not heard back. The council reconvenes January 8

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