Environmental groups are asking Memphis Light, Gas & Water (MLGW) for more time on its power supply decision to allow for further review and public comment.
MLGW staff recommended last week that the utility stay with the Tennessee Valley Authority (TVA) as its power provider. The recommendation came after local review on the decision, several studies on energy reliability and potential savings, and much noise made by environmental groups who say TVA is not doing enough on sustainable energy and that its contracts are too long.
When MLGW announced the recommendation last week, it came with a vague, 30-day period for public comment on the move. Three groups — the Southern Environmental Law Center (SELC), Protect Our Aquifer (POA), and Memphis Community Against Pollution (MCAP) — asked the MLGW board commissioners for an additional month.
The request would give another month for public comment, and another month after that for MLGW’s commissioners to review those comments. If the request is granted, a final vote on the power-supply decision would come no sooner than November 30th.
”The [MLGW board of commissioners] must have adequate time to meaningfully consider public comment,” reads the letter issued Tuesday. “Otherwise, the board risks the appearance of merely rubber-stamping the staff recommendation. It is particularly important that the Board’s decision-making process be open and transparent because of the existing relationships between TVA and MLGW.”
MLGW has been a TVA customer for more than 80 years. MLGW is also TVA’s largest customer.
Last week’s announcement of the MLGW staff recommendation was criticized by the Southern Alliance for Clean Energy (SACE) saying “we’re confident it’s not in the best interest of MLGW customers.” The group said the new 20-year contract, which has already been signed by numerous other TVA clients, would “lock the utility and its ratepayers into a forever contract.” The current contract with TVA is up every five years.
“We disagree with the recommendation MLGW staff presented to the MLGW Board of Commissioners and look forward to finally being able to see the responses to the MLGW power-supply proposal,” said Dr. Steven Smith, SACE executive director. “We are concerned that today’s presentation was highly skewed and lacked an appropriate balance of risk and benefits. We look forward to reviewing the underlying data that these assumptions were built on.”
Other providers, SACE said, could offer offer longer-term economic and environmental benefits. These benefits could also greatly increase now, SACE said, after the passage of the Inflation Reduction Act. SACE said the new law — with its billions in spending for environmental projects — could “greatly amplify alternative portfolios’ estimated savings and energy resiliency benefits” that could “be worth hundreds of millions of dollars to Memphis if MLGW is not restricted by TVA’s contract requirements.”
As for environmental issues, TVA said the day before MLGW’s announcement last week that it plans to be 80 percent carbon free by 2035 and completely carbon free by 2050. TVA’s timeline does not match that of President Joe Biden, who wants a carbon free power grid by 2035. TVA says it must move slower to ensure reliability.
TVA has said that more than half of its energy sources are carbon free and not “not affected by fuel price volatility.” The TVA board voted last week to keep its base electric rate steady through its next fiscal year. But many Memphians were shocked this summer as high natural gas prices from TVA made for much higher MLGW bills.
MLGW staffers said if the utility stayed with TVA, customers would save about $32 a year on their electric bills. Overall, MLGW said the new contract with TVA “demonstrates the greatest value and least risk.” They said the move would save MLGW $125 million over the next five years and $944 million over the next 25 years.
The three groups asking for more time for board members to review the possible TVA move asked for more transparency in the vote as well. They said the long relationship between TVA and MLGW is yet another reason for board members to have a close look at all the offers not he table.
“TVA is MLGW’s current power provider, and the utilities’ decades-long relationship gives TVA unique access to MLGW and its customers,” reads the letter. “Indeed, recent news reports reveal that TVA spent the past several years lobbying suburban governments served by MLGW to support the federal utility’s bid.
“TVA is also MLGW’s largest water customer, giving the federal utility another advantage in this decision-making process and adding another reason why it is important that the board carefully evaluate independent, third-party perspectives shared during the public comment period.”
