Tag: jt-young

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MLGW Takes First Step In Power Supply Decision

Memphis Light, Gas & Water (MLGW) president and CEO J.T. Young recommended to the utility’s board Wednesday, August 19th, that it should find a consultant to help find a possible new power provider, a move that could shift MLGW away from the Tennessee Valley Authority (TVA).

Young said he intended to issue a request for proposals (RFP) to companies that would help MLGW’s leadership team to manage the process of finding a new power supplier. That is, the MLGW leadership team will hire a team to help them find a new power supplier.

The recommendation came during the MLGW board meeting Wednesday morning. It came after about two years of debate as to whether or not the utility should stay with TVA or find a new supplier.

That decision presented itself as some are critical of TVA for not investing in Memphis as it does in other cities, even though MLGW is TVA’s largest customer. Different groups have also projected that MLGW could save between $220 million and $450 million every year by switching away from TVA. MLGW hired Siemens to review the savings and they concluded MLGW could save $130 million each year.

Young’s recommendation could be a monumental first step away from TVA. Memphis’ energy has come from TVA for 80 years. MLGW spends about $1 billion each year to buy electricity from TVA.

MLGW board members did not vote on the recommendation Wednesday. The main criticism of the process from board members was that it was not moving fast enough. Mitch Graves, the MLGW vice board chair, wanted Young and his team to just hire a consultant, rather than opening it up to a bidding process. That process would only add time, he said, and he trusted Young to hire a good firm.

“The longer we push this out there … there are savings, there’s money on the table,” said Mitch Graves, the MLGW vice board chair. “Every week, every month, and every year that goes by, we’re leaving money on the table for our citizens.

“We started this journey and have been in it for while. If you need help, get the help and move on. Don’t spend another three months on finding your help. They’re out there and they do this every day.”

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Leaving TVA Could Free up MLGW Funds for Infrastructure Improvements

CREDIT: MLGW

MLGW

Switching to another power supplier could help Memphis Light, Gas, and Water (MLGW) save money in one area, and invest in another, such as infrastructure, which could reduce power outages in the long run, says Memphis Mayor Jim Strickland.

After heavy storms hit Memphis on May 18th, approximately 27,000 MLGW customers were without power and some didn’t have it restored until Tuesday, May 21st. Strickland said in his weekly newsletter last week that that’s “unacceptable.”

“First, let’s talk about power outages,” Strickland wrote. “We had too many of them for too long after Saturday night’s storm. It’s unacceptable. So, how to fix it?”

The mayor said the city’s electric infrastructure is “old and in dire need of an overhaul.”

However, Strickland said that’s a “high-dollar endeavor,” and paying for infrastructure upgrades would be a challenge.

To that end, the mayor said the city is “serious about the possibility of finding major savings” that could come as a result of a switch from the Tennessee Valley Authority to a new power supplier with lower rates.

Strickland said switching could save MLGW money that would fund new infrastructure.

Infrastructure includes everything from poles, wires, transformers, and the metering system, said MLGW CEO and president J.T. Young.

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Young discussed similar infrastructure concerns Thursday during a Facebook Live discussion, but said that improving infrastructure will not reduce all outages.


Young said the infrastructure challenges that we have are to some degree significant, but that when severe weather like the May 18th storm hits Memphis, “we were going to experience outages regardless of the type of infrastructure.”

But, Young said the upgrades that the utility is planning would minimize the number and length of outages.

“I think the perception might be that nothing’s been done over the past several years with our system,” Young said. “When things break, we replace them. That costs money.”

Looking at past budgets and data, Young said MLGW has invested “quite a bit” of both capital and operational funds into maintaining the system.

“I would equate it to maintaining your car,” Young said. “You take it in every so many miles and you get oil changes and those kinds of things, but you really don’t do an overhaul of your engine or transmission or what have you, except for rare situations.”

Young said this is that rare occasion in which much of the utility’s system is in need of an overhaul.

“We’ve got some very, very old equipment,” Young said. “You can maintain equipment, which is what we’ve done and I think our folks have done a great job at keeping the system up and running, but it is certainly time to make some major investment in equipment.”

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Some of those investments will be put into automated services, underground cable repairs, and tree trimming, which will result in fewer outages, Young said.


“We just know it’s time to make some rather significant investments from a preventative standpoint, where we will not have to be reacting all of the time,” Young said. “Now it’s time to make some much needed investments so we aren’t always being reactive.”

In the meantime, as summer approaches, customers can expect more storms, Young said.

“No matter what type of infrastructure we have, we’re going to have outages,” Young said. “The resilience of our infrastructure is important, but even with the most resilient infrastructure, you will have occasional outages.”

When outages occur, Young said the utility moves “as quickly as we can” into the restoration process because “we know we don’t just deliver electricity.

“We are delivering hope. When you don’t have power, you really feel like sometimes you don’t have hope, especially the longer it goes.”

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TVA Makes Case For MLGW Not to Switch Suppliers

CREDIT: Maya Smith

Maya Smith

Jeff Lyash, president and CEO of TVA speaks to PSAT

The head of the Tennessee Valley Authority (TVA) told the team charged with weighing power supply options for Memphis that he’s “committed to helping them through the process.”

At the second meeting of Memphis Light, Gas & Water’s (MLGW) Power Supply Advisory Team (PSAT), Jeff Lyash, president and CEO of TVA, said he would like to see Memphis stay with TVA, but that he’s committed to helping Memphis make the “right decision.”

“It’s a critical decision for MLGW and the community of Memphis,” Lyash said. “So we want to help you through this process in order for you to get all the information you need … But, at the end of this, we would like to be your power supplier.”

Lyash said that in the past TVA has not “lived up to our or your expectation” in serving Memphis, but that “one of my objectives this year is to change that.”

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Making the case for TVA, John Thomas, chief financial officer of TVA, said Memphis has the lowest, most competitive utility rates in the country,

Thomas also said that the utility doesn’t anticipate those rates increasing over the next 10 years. This summer, the utility will draft its long-range plan for the next 10 years, which will include rate projections.

Although Memphis has the lowest rate in the country, at 6.81 cents per kilowatts hours, Memphis City Council member Martavious Jones, who is serving on the PSAT, said that about 20 percent of that rate is allocated to TVA’s debt budget.

Jones said without accounting for the utility’s debt, the rate would be 4.81 cents per kilowatt hour. If switching to another utility, with no debt, Jones said the rate might be cheaper, but the group should also consider the costs of transmitting the power to Memphis.


Lyash agreed, saying that MLGW should be “very careful and diligent” throughout the process and understand the “risks and assumptions” of any decision.

Lyash said that if MLGW pays 3 cents per kilowatt hour, “that’s not enough.” He said the utility also has to pay for reliability, operations, transmission, and maintenance. TVA’s rate includes those, he said.

“What you’ll see over time is that people like to quote you an energy price, but make sure you’re getting the whole picture.”

Lyash said that TVA’s transmission system is “arguably the most reliable in the country.”

“You need to consider what stands behind the product you’re buying,” he said. “Our power portfolio is strong and moving in the right direction.”

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MLGW president and CEO J.T. Young, who is heading the PSAT group, said the purpose of Thursday’s meeting was not to deliver a “TVA sales pitch,” but to look at the current state of operations in order to understand “how we get what we get.”

“When we anticipate anything different from that, we need to start with a good base line,” Young said.

Ultimately, any recommendations the PSAT team comes up with will have to be approved by both the MLGW board of commissioners and the Memphis City Council.

Still, Young said their input is “critical” to the final decision.

The next PSAT meeting will be on June 6th at the Benjamin L. Hooks Central Library at 10 a.m. Young said the group will review the recent studies done on alternative power suppliers. All of the meetings are open to the public.

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Advisory Team to Consider TVA Switch Named

CREDIT: MLGW

MLGW

A solar panel array at Agricenter International.

The head of Memphis Light, Gas and Water (MLGW) has named the 20 members of a new advisory team tasked with exploring alternative power supply options.

J.T. Young, president and CEO of MGLW returned to the Memphis City Council Tuesday to lay out the details of the Power Supply Advisory Team (PSAT) that he first proposed to the council two weeks ago.

Young said then that he and Memphis Mayor Jim Strickland had been working on forming the team to consider switching from the Tennessee Valley Authority as a power supplier — a move that has been at the center of conversations between MLGW and the city council for months.

The PSAT so far consists of local executives, elected officials, and MLGW officials, including Young, who will serve as the facilitator.

Executives on the committee include Richard Kelley, vice president for facilities at Methodist Hospital; Mark Halperin, executive vice president of Boyle Investment Company; Beverly Robertson, CEO of the Greater Memphis Chamber; and Josh Tulino, vice president and general manager at Valero.

Local officials — including the city’s chief operating officer Doug McGowen, who is the mayor’s designee, and Bo Mills, public works director for Germantown — will also take part.

City Councilman Martavious Jones, Shelby County Commissioner Eddie Jones, as well as Deidre Malone, president of the NAACP Memphis Branch; Dennis Lynch of the Sierra Club; and Sandra Upchurch of the Southern Alliance for Clean Energy, are also slated to join the team.

Councilman Jones told Young that he would like to see three to five “regular citizens” serving on the advisory team as well: “That would really speak to the integrity of the process.”

Young said he would take that into consideration, adding that all meetings will already be open to the public.

The first of seven meetings planned for this year is Tuesday, April 30th. One meeting — each with a different topic — is slated for each month through November. Topics include the state of TVA, power supply studies, and MLGW’s Integrated Resource Plan (IRP).

The IRP, which Young said will be spearheaded by an outside consultant, will consist of data, such as a 20-year hourly energy demand forecast, evaluations of the costs and risks for different supply options, as well as assessments of MLGW’s current staff, technology, and facilities.

The utility has issued a request for qualifications in order to find a consultant for the job. Young anticipates selecting a consultant by May.

The IRP process will be “deliberate” and “objective,” Young said, potentially taking up to a year to complete.

“We will not stop this process until it’s finished,” Young said. “In order to maintain the integrity of the IRP process, it’s important that we go through the process and let the process tell us what’s optimal.”

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Advisory Group to Consider MLGW Switch from TVA

A Memphis Light, Gas, and Water (MLGW) official said Tuesday that the utility is forming an advisory committee to weigh the option of alternative power sources.

Switching from the Tennessee Valley Authority (TVA) to another power source has been a recurring topic for the Memphis City Council and MLGW officials over the past several months.

J.T. Young, president of the utility, told the council MLGW committee Tuesday that he’s been working with Memphis Mayor Jim Strickland to form a committee who will consider power sources other than TVA. Young said the process will be “rigorous” and could take months to complete.

The group will be comprised of business leaders, community members, and officials, who,  Young said, haven’t been finalized yet. He anticipates introducing those members to the council in two weeks.

At the same, MLGW is working on an integrated resource plan, which will outline the utility’s resource needs in order to meet electricity needs over a set period of time.

Young said that plan, along with input from the community and advisory team, will be taken into account when deciding whether to sever its agreement with TVA.

If the utility were to move away from TVA, it would have to give a five-year notice. Young said there are many other considerations that have to be taken into account if MLGW were to end the agreement that “go well beyond what the studies have shown.”

Ultimately, Young said the decision to switch power sources will be made by MLGW’s board and the city council.

A February study showed that MLGW could save between $240 million and $333 million each year if it were to switch from TVA.

Ordered by the environmental advocacy group, Friends of the Earth, the study suggested that Memphis could build its own energy systems or buy it from another supplier like Midcontinent Independent System Operator (MISO), the nonprofit energy group supplying energy for parts of 15 states like Louisiana, Arkansas, and Mississippi.


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Council Recap: Water Rate Hike, South Cordova De-annexation OKed

CREDIT: Maya Smith

Maya Smith

The Memphis City Council

After months of debate and delay, the Memphis City Council approved an increase in water rates Tuesday, but voted not to raise gas and electric rates.

The vote means Memphis Light, Gas, and Water (MLGW) customers will start paying an additional 45 cents per month, beginning in March.

MLGW officials have been seeking water, gas, and electric increases totaling 10.5 percent over five years since December. If all three hikes were approved residential customers would have paid, on average, an additional $18.56 per month during the five year period.

J.T. Young, president and CEO of MGLW, said the hikes would have helped fund about $740 million worth of improvements to the utility’s aging infrastructure.

Instead, Tuesday the council upheld its vote from two weeks ago opposing a gas rate increase. The council voted 6-7 against electric hikes, but approved the 45 cent monthly hike on water with a 9-4 vote.

As council members were reluctant to approve the original ask, Councilwoman Patrice Robinson introduced the idea as a way to offset the utility’s negative net income.

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Young said if the utility stays in the negative, the state could step in to regulate rates, likely setting them higher than the utility’s ask.

Councilman Worth Morgan said the council has to take responsibility to avoid the state “coming in and acting like big brother.”

“No one is really arguing that we don’t have aging infrastructure that needs replacing,” Morgan said. “The question is when and how are we going to replace it.”

The increased revenue will go toward improving infrastructure at the utility’s water pumping stations, which Young said, on average, are about 58 years old. The utility has a “good bit of restoration and rehabilitation that needs to be done,” Young said.

Tuesday Young also presented the results of a public phone survey conducted by the utility regarding the rate increases. Of the more than 2,000 respondents, Young said 46 percent wanted more information, 23 percent would consider rate increases, 16 percent would support an increase, and 15 percent would not support the increase under any circumstances.


‘Right-sizing’ the city

The council also approved the de-annexation of portions of South Cordova on the third and final hearing.

Approximately two-square miles, housing around 4,000 residents in 1,806 homes, will officially be outside of the city limits beginning in 2020.

Residents of the community, many of whom spoke to the council Tuesday, support the move and have been pushing for it for some years.

The residents will be expected to pay taxes through 2023.

Doug McGowen, the city’s chief operating officer, said the de-annexation is in step with the city’s effort to “right-size” the city, while “building up and not out.”

Although the city will lose about $3 million of tax dollars annually, McGowen said the city will not have a reduction in revenue because resources once used in the de-annexed area will be saved. McGowen added that the resources removed from South Cordova will be re-allocated to other areas of the city to provide better municipal services to the city’s core.

For example, McGowen said the move will decrease the area the Memphis Police Department patrols by 8 percent.

This is the fourth area of the city the council has voted to de-annex. Last year Rocky Point, Southwind-Windyke, Eads, and Riverbottoms were approved for de-annexation.

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MLGW Explains Need for Rate Increases, Infrastructure Improvements

As Memphis Light, Gas, and Water (MLGW) prepares to return to the Memphis City Council next week to again make its case for rate increases, the utility is beefing up its public engagement efforts.

MLGW’s president and CEO J.T. Young is scheduled to host a Facebook Live chat Tuesday (today) at 1 p.m. to answer questions and address concerns the public might have about rate increases or system upgrades.

Questions for Young can be submitted via Twitter, Facebook, and Nextdoor.

The utility is also holding a series of town hall meetings this week to inform customers about the rate changes, infrastructure, and the “truth about MLGW outages.”

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“Because of the nature of media reports, you may only get a 30-second sound bite about MLGW news,” reads a flyer about the meetings. “Quite frankly, that’s not enough time to talk about some complex issues surrounding how we deliver power to your home or why the infrastructure, most of which was installed in the 1950s, is in need of an overhaul.”

The first of four meetings was held Monday at the Bert Ferguson Community Center. There, customers were told that the increases for water, gas, and electric rates total 6.8 percent over five years, or about an additional $11.54 per month for customers. The additional funds would get MLGW infrastructure “where it needs to be,” Young said.

Attendees were also told that MLGW has aging infrastructure and “downward-trending electric reliability.” Therefore, the utility is looking to implement a five-year reliability improvement plan funded by rate increases. The plan includes increased tree trimming, as untrimmed trees are the primary cause of power outages. It would also make improvements to the utility’s distribution automation and water-pumping station, as well as replace substation equipment, poles, and cables.

Under the plan, the utility could also implement gas regulatory initiatives, build a new north community office, and construct new wells.

The remaining meetings are slated for:

• Tuesday, February 12th, 6 p.m. at the Glenview Community Center


• Wednesday February 13th, 6 p.m. at the Ed Rice Community Center


• Friday February 15th, 5 p.m. at the Whitehaven Community Center

MLGW Explains Need for Rate Increases, Infrastructure Improvements

This public outreach from the utility comes as the city council continues to delay approving the rate increases, which were first presented to them in December.

Last week the council voted 5-5 on the proposed gas rate increase before delaying the votes on hikes to the water and electric rates for another two weeks.

The numbers proposed to the council differ from those presented at Monday’s town hall meeting. Last week the council discussed a total increase of 10.5 percent over five years, rather than the 6.8 percent increase discussed at the public meeting. 

Against the increases were council members Gerre Currie, J Ford Canale, Frank Colvett Jr., Cheyenne Johnson, Jamita Swearengen, Berlin Boyd, and Sherman Greer.

Boyd said last week that MLGW has to find other ways to finance improvements to infrastructure. Boyd, echoed by Canale, pushed the idea of MLGW switching from TVA as a power source to a cheaper option or for TVA to lower its prices to become more competitive. This way the utility could use the money that would be saved to fund infrastructure improvements, Boyd said.

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Young explained that ending MLGW’s contract with TVA requires a five year notice and that the potential savings from switching aren’t a guarantee.

Meanwhile, Jones and Robinson contending that something has to be done to improve the infrastructure, pushed for their colleagues to support the hikes.

Jones said the council is in its current position because of past councils’ inability to pass rate increases.

“Deferred maintenance does not go away,” Jones said. “So all that we are doing is postponing this, pushing it down the road, and just requiring a greater rate increase on the same rate payers that we are concerned about now by not taking any action.”

The council will vote on electric and water rate hikes at its February-19th meeting next week. The council could also reconsider its vote on a gas rate increase then.

Tune in to MLGW’s Facebook Live session at 1 p.m. for more information about the utility’s proposals.