Tag: MLGW Rate Increase

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.

Memphis, Light, Gas, & Water (MLGW) customers might start paying higher rates in 2018, after a Memphis City Council committee began discussion Tuesday of water, gas, and electric rate increases.

CEO of MLGW Jerry Collins, Jr. told the committee that the revenue from the increased water rates would be used to fund research on the Memphis Sands Aquifer, the source of Memphis’ drinking water.

Dr. Brian Waldron, the University of Memphis’ director of the Center for Applied Earth Science and Engineering said there is currently a threat concerning the quality of water in the aquifer and that the additional funds will help the city be proactive and assess where exactly the contamination breaches, if any, are in the aquifers. He said fixing the problem now will save thousands of dollars in the future.

With a 1.05 percent increase in rates, customers would pay an additional $11 a month. Collins said this would yield close to $1 million a year of dedicated research funds.

Gas and electric rates, MLGW officials said, haven’t seen increases in a “very long time,” noting that the last electric increase was in 2004 and the last gas increase was in 2008.

Collins adds that the average utility bill for Memphis residents is about $34 less than it was 10 years ago. But, he said that stagnant rates have created a weakening financial position.

To mitigate those financial problems, the utility presented the council committee with three options to increase water, gas, and electric rates.

The options propose increasing rates over one, two, or three years.

The full council is set to vote on the increases and which option to pursue at the next meeting on Tuesday, Dec. 5.