MEMPHIS, Tenn. (WMC) - Memphis Light, Gas and Water customer’s electric bill is going up by 3 percent later this year. Memphis City Council passed an electric rate increase Tuesday night.
However, the rate increase comes with some conditions. Councilman JB Smiley filed a substitute resolution.
The resolution requires reports from MLGW in February, March, April and May outlining the power company’s efforts to reduce costs and legal opinion regarding bond issues.
“To put it in football terms we finally got it across the goal line,” said Councilman Martavius Jones.
After two years of debate, the city council voted to increase the electric rate by 3 percent in July of this year. Over the next three years, rates will increase by 7.2 percent.
It will add up to an extra $9 a month for the average MLGW customer.
MLGW CEO J.T. Young says the increase will pay for much-needed infrastructure improvements.
Equipment failure at a substation Saturday left more than 12,000 customers in the dark.
“And what customers will begin to see or should be able to see is shorter duration of outages and they should be able to see better reliability overall when it comes to their electric service,” said Young.
Young says because the council wants to take a closer look at the issuing of the bonds, it might delay infrastructure improvements by a couple of months or so.
Tuesday’s rate increase comes before the council has to make a final decision on a power supplier.
MLGW could buy power from a cheaper source than TVA, meaning substantial savings for the utility company.
“The needs that we have for infrastructure improvement, those needs are immediate and certain, the power supply decision is uncertain, even future savings are uncertain,” said Young. “So what we didn’t want to do is couple those two together because that’s like mixing apples and orange.”
Young says he will be making a recommendation to the MLGW board about their power supplier sometime in late Spring.