MEMPHIS, Tenn. (WMC) - Leaders at Memphis Light Gas & Water are facing some major decisions, including whether the utility could get its power cheaper from a source other than the Tennessee Valley Authority. The utility is also asking the Memphis City Council to raise rates, and a consultant report has recommended job cuts.
The utility’s Power Supply Advisory Team or PSAT, considering that big TVA decision, met for the final time this year Thursday. The group is more than halfway through with their work.
“I would say it’s a critical point, a watershed moment for us in our history, as a company, as an entity,” said J.T. Young, MLGW president and CEO.
On Thursday, members of MLGW’s Power Supply Advisory Team heard in-depth analysis of multiple studies that have shown the utility could save ratepayers by working with other power suppliers and moving away from the Tennessee Valley Authority. Some pushing for the utility to leave TVA said the savings could be $1 billion in a decade’s time.
“We are right now coming up with the house plans, and at the end of the day, we will figure out what the house will look like,”said Young. “How should we get power to Memphis and what manner and what types and what’s the optimal way to do that.”
Former MLGW CEO Herman Morris now works with Friends of the Earth. He said leaders should consider alternative energy forms like wind and solar, options that he said weren’t reliable when he helmed the utility.
“There’s been an explosion in the technology to allow those to be delivered to our homes at a much, much cheaper price,” said Morris.
Power supply isn’t the only hot topic.
Earlier this week, MLGW leaders appeared before Memphis City Council members letting them know they’d be asking for rate increases in the 2020 budget. The issue was much debated in late 2018 and in early 2019, and the council only signed off on water rate increases, not gas or electric. In voting down the proposal, council members suggested that MLGW should identify internal cuts before coming to customers.
A consultant report released in late October found MLGW should consolidate 300 to 400 jobs and close community offices to save millions, noting the utility was overstaffed in comparison to its peers. Young said he anticipates any cuts would come through attrition.
“The decisions we make now will have lasting effects on our customers, on our citizens, and on our community,” said Young.
Young said three meetings of the PSAT are planned for 2020 before a final recommendation is released on whether to get power from TVA as the setup exists now or make a change.
“We are really rolling up our sleeves. We are really studying all the options out there,” said Memphis Mayor Jim Strickland. “We’ve got a cross-section of our city and our governments looking at this issue, and I look forward to their recommendations.”
The PSAT recommendation is expected in late spring.
As for the most recent rate hike proposals, the Memphis City Council will consider those in the coming weeks. New council members will take office in January 2020.