A Memphis City Council committee reopened a discussion Tuesday on hiking up utility rates for Memphis, Light, Gas, and Water (MLGW) customers.
In December, after the full council voted down a resolution to increase water rates, the body sent the resolutions for both gas and electric rate increases back to the committee for further discussion.
MLGW CEO Jerry Collins presented two new options Tuesday for electric and gas rate hikes. The first would delay the initial increases until September 2018. At that time, gas rates would rise by 3 percent and electric rates by 2.3.
Then, in January 2019 and 2020, gas would increase again by 3.8, while electric rates would go up by 2.8 percent.
Similar to the first, the second option would postpone the increases to July of this year.
Electric rates would increase by 2.3 percent in July and again in January for the next two years, and gas rates would increase initially by 3 percent and then by 3.7 percent in January of 2019 and 2020.
For gas, councilman Worth Morgan motioned for the first option, saying that it would give people living on fixed-incomes more time to budget and prepare for the change.
However, the committee voted to return to the full council recommending option A, one that the group had previously agreed upon. Under this option, gas rates would increase by 4.5 percent beginning next month and then again in January 2019.
For electric, the committee voted to go with the second option above, which implements a 3 percent increase in July and a 3.7 percent increase over the next two years in January.
This option, Collins said, would cause the utility to lose $13 million in revenue over the three year period, but to the benefit of the customers.
Additional revenue collected from the electric rate increases is slated to fund some of the utility’s operations and infrastructure improvements, Collins said.
Council member Martavius Jones said if a portion of the revenue is going to go toward improving infrastructure, then approving the increase is a “no-brainer.”
“Rate increases for me translate to infrastructure improvements,” he said.
