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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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MLGW Will Now Let Customers Pay Same Amount Each Month

Memphis Light, Gas and Water (MLGW) now has a way for customers to pay the same amount for utilities each month, rather than paying varying amounts from month to month.

Through MLGW’s program, Budget Billing, customers’ bills will stay the same amount each month, by spreading out your annual energy expense over a 12-month period.

MLGW said the program doesn’t reduce customers’ overall energy expense. Rather, it allows residents to know the exact amount they will pay each month, which the utility anticipates will help customers manage their household budgets better.

After enrolling in the program, the utility will analyze residents’ previous year’s total utility usage to predict monthly payments, adjusting for rate changes and weather conditions. Total usage is then divided between 12 months.

The utility will do monthly reviews to compare how much customers’ utility usage is versus how much their monthly installments are.

After a periodic review, monthly payments might be adjusted to match actual usage. At the end of the year, any under- or over-payment will be factored into the next year’s payment installments.

Customers can apply for the program via mail, phone, email, or the MLGW website. Residents must have lived at their current address for at least six months to participate.

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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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Study: Switch From TVA Power Could Save Up To $333M

CREDIT: TVA

TVA

TVA’s new Combined Cycle Plant.

Memphis Light, Gas & Water could save $240 million to $333 million each year by switching away from the Tennessee Valley Authority (TVA) for electricity, according to a new report issued Monday.

Friends of the Earth, an environmental advocacy group, ordered a study of the switch from the Brattle Group, an “energy, economic, and financial research group that advises major energy providers, utilities, and governments around the country and across the globe.”

The study is called “Power to Memphis – Options for a Reliable, Affordable, and Greener Future.” It contends that if MLGW and the city of Memphis terminated its contract with TVA and develop an alternative energy supply, the savings each year could reach to $333 million per year.

The options in the study do not include the proposal to use an abandoned TVA nuclear power plant in Alabama for Memphis energy.

“We could have reliable, cheaper, cleaner power for customers across Memphis,” Herman Morris, former MLGW president, said in a statement. “Memphis has the power to become a showcase for 21st century energy that will cost less and stop polluting the air and water. We should be looking ahead and not backward to TVA’s expensive and dirty nuclear reactors and coal-fired power plants.”

If MLGW signed letters today to end its contract with TVA, MLGW would still have to buy power from TVA for five years. In that time, Memphis could build its own energy systems or buy it for another supplier like Midcontinent Independent System Operator (MISO), the nonprofit energy group supplying energy for parts of 15 states like Louisiana, Arkansas, and Mississippi.

MLGW

A solar panel array at Agricenter International.

All of the options studied would create fewer emissions than those with TVA’s current power supply, according to the study, and some scenarios saw all of Memphis’ power coming from renewable sources as early as 2050.

“MLGW customers deserve to know their options for cheaper bills and cleaner energy,” said former TVA chairman David Freeman. “City officials and MLGW officials need to begin the conversation now so the required five-year TVA notice process can begin sooner rather than later.”

TVA officials did not immediately respond to an invitation to comment on the study. We’ll update this story if they do. 

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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.

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Council Recap: MLGW, Shared-Mobility, & Convention Center Hotel

The Memphis City Council has put off approving rate increases for Memphis Light, Gas, and Water (MLGW) customers since December, and did so again on Tuesday.

The utility is asking the council to approve water, gas, and electric rate increases totaling 10.5 percent over five years. The hikes would not take effect until 2020. The average customer would pay an extra $18.59 over the five-year period. J.T. Young, MLGW president, said the increased revenue would go toward improvements to the utility’s infrastructure.

The council voted 5-5 on the proposed gas rate increase before delaying votes on water and electric rate hikes for two weeks.

Voting no for gas were members Gerre Currie, J Ford Canale, Frank Colvett Jr., Cheyenne Johnson, and Jamita Swearengen. While Robinson, Reid Hedgepeth, Martavious Jones, Worth Morgan, and Kemp Conrad voted yes. Members Joe Brown, Berlin Boyd, and Sherman Greer were not present for the vote.

Young said several projects are on hold pending the council’s approval of the rate increases. He also said that putting off infrastructure repairs will only add to the cost of the improvements later. Young added that some of the improvements are needed to help the utility remain in compliance with safety standards.

Boyd, who is against the hikes, said 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.

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.

Boyd said — putting himself in the shoes of citizens that might already be experiencing hardship — he can’t support any rate hikes.

Robinson implored her colleagues to approve the increases, arguing that there are several programs in place to offset the cost of utilities for those living in poverty here. She asked the council to consider the needs of the entire county, and not to harp on the 25 percent she estimates live below the poverty line here.

“We can’t kick the can down the street any longer,” Robinson said. “We have to consider all citizens, not just the few. We’re doing everything we can to put a safety net around them … What else do you want us to do? We’ve got to able to stand in front of our constituents and say this is in the interest of all ratepayers.”

Jones who also supports the hikes 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 meeting in two weeks. The council could also reconsider its vote on a gas rate increase then.

Shared Mobility

The city could invest $75,000 into shared-mobility infrastructure here.

Explore Bike Share

A Downtown bike-share station

The council is considering a resolution proposed by Conrad that would allocate the $75,000 from fees the scooter companies, Bird and Lime, pay to operate here. Per city ordinance, both companies give the city $1 a day per scooter. Conrad said that’s generated $100,000 in revenue and will generate $200,000 annually.

The $75,000 will go toward growing the nonprofit Explore Bike Share, Conrad said. Currently, EBS operates about 60 stations with close 600 bikes, but the additional funds would help the nonprofit expand by another 300 bikes.

“This is about investing in our public transportation ecosystem, by offering a lot of ways that you can get around and get you a job,” Conrad said. “One of the biggest reasons we have so many unfilled jobs is because of the transportation gap. Scooters and bikes are a good way to fill those.”

Second Convention Center Hotel

The council also passed a resolution Tuesday relating to the financing of the second convention center hotel.

The Tennessee Building Commission approved the use of revenue from the Downtown Tourism Development Zone (TDZ) to finance the hotel last year.



The resolution comes after the Sheraton hotel chain filed a lawsuit against the city for the tax incentives offered to Loews to construct the hotel. The lawsuit claims the incentive gives an unfair advantage to Loews.

Sheraton also claims the city didn’t take the necessary steps to follow through on the state’s approval of the TDZ request.

But the resolution approved Tuesday states that the council did act properly by considering a feasibility study and a hotel-need analysis before adopting the action by the Tennessee Building Commission.

Sheraton’s lawsuit against the city will be heard later this month in Shelby County Chancery Court.

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Former TVA and MLGW Heads Criticize Nuclear Power Proposal

CREDIT: TVA

TVA

Bellefonte nuclear plant

The former chairman for the Tennessee Valley Authority (TVA) joined former Memphis Light, Gas, and Water (MLGW) president in speaking out against a proposal for Memphis to switch to a nuclear power source.

Dave Freeman, former TVA head, and Herman Morris Jr., former MLGW leader, sent a letter dated November 19th to the Memphis City Council and Memphis Mayor Jim Strickland, urging them not to support the proposal for MLGW to switch from TVA to the Alabama-based nuclear plant, Bellefonte.

A representative from the group Nuclear Development LLC told the council last month that the switch could save Memphis $500 million a year.

“We write to express our grave concern that the city of Memphis is considering the purchase of electricity from the unfinished Bellefonte nuclear power reactors,” the letter reads. “This plant is so outdated that even TVA couldn’t complete them after a half of century of trying.”

The letter continues, urging the mayor and council to heed the advice of current MLGW president J.T. Young, who told the council he was skeptical about the proposal at its October 9th meeting.

One of Young’s concerns was whether or not Nuclear Development would be able to complete the construction of the plant.

The pair said that the plant’s two unfinished reactors, which were first designed in the 1960s are “woefully out-of-date.”

Even if construction of the reactors is completed, Morris and Freeman argue that the cost to maintain the plant would be “enormous,” meaning the price of power would be more expensive than from TVA or from other “clean, safe, renewable resources like solar and wind power.”

“This fact is why old nuclear power plants around the country are closing,” the letter reads. “They simply cannot compete against safer, cleaner, and better 21st century energy technologies.”

Additionally, the letter cites that Memphis is TVA’s largest customer, and that Bellefonte could not provide power to all of the city, as it is “too small to meet all our needs.”

“At best, Bellefonte could provide only a fraction of the power supply that Memphis would need,” while the rest would have to come from other sources outside of Nuclear Development’s ownership.

The duo urged the council to await the December release of MLGW’s study on long-term power supply options

“We therefore urge you to say ‘NO!’ to an attempt by Nuclear Development LLC to mislead Memphians with unsupported claims of cost savings in order for it to obtain a handout from the federal government.”


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Proposal to Use Alabama Plant for Power Raises Concern

CREDIT: TVA

Facebook

Scott Banbury of Sierra Club Tennessee

A well-known Memphis environmental activist is leery of a proposal for Memphis to buy its power from a currently incomplete Alabama-based nuclear plant.

The proposal for Memphis to switch from the Tennessee Valley Authority (TVA) to the Bellefonte nuclear plant in Hollywood, Alabama, was presented to a Memphis City Council committee on Tuesday by former COO for TVA Bill McCollum, who is now with the group Nuclear Development LLC. McCollum said that the switch could save Memphis $487 million annually.

Currently, Memphis Light, Gas and Water (MLGW) pays TVA $1 billion a year for electricity. Urging the council not to approve MLGW rate increases, McCollum told the council that “there is a better way to improve infrastructure and help the citizens of Memphis rather than just raising the utility rates and saddling customers with higher bills.”

But, Scott Banbury, the conservation programs coordinator for the Tennessee chapter of the Sierra Club, is skeptical of the proposal. He called it a “financing scheme,” in an email to the Flyer, saying that Nuclear Development is a “self-interested investor.”

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“Nuclear Development, LLC has been disingenuous, at best, suggesting that they could lower MLGW ratepayers’ fees by one half,” Banbury wrote. “Nuclear Development, LLC has no real idea of what their final costs will be, and as evidenced by recent experiences in Georgia and South Carolina, the costs and subsequent rates would eventually be much higher.”

TVA

Bellefonte nuclear plant


Of the study MLGW president J.T. Young said the utility is conducting on infrastructure needs and energy options for the future, Banbury said he hopes MLGW is looking at “clean, renewable energy sources like solar and wind power to meet our future demands.”

“MLGW CEO J.T. Young is appropriately cautious about wedding Memphis to Nuclear Development’s pie-in-the-sky pursuit of new nuclear power plants when other such ventures are failing all around us,” Banbury said. “Sierra Club is glad that MLGW is pursuing the study of alternate energy providers.”

Banbury suggests that MLGW invest in renewable energy options, which would “significantly reduce costs to MLGW ratepayers and unburden Memphis from financial responsibility for TVA’s bad choices in the past.”

The “bad choices,” Banbury said, result in unlined toxic coal ash ponds along rivers throughout the state. He adds that one of those ponds is here in Memphis and is leaking arsenic, lead, and flouride into the groundwater.

Banbury also said that MLGW should break its contract with TVA that bars the utility from making direct investments in local solar generation, contracting windpower from the midwest, and developing substantial energy efficiency.

“Memphis needs to embrace a broad based supply of clean energy — solar, wind, and efficiency — and not be locked into sole reliance on dirty fossil fuels or nuclear energy,” Banbury said. “Sierra Club says yes to breaking with TVA’s 100 percent requirements, yes to embracing renewable energy, and no to nuclear energy.”

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New Rules on Deck for Drilling Wells, Protecting Water

CREDIT: Corey Owens/Greater Memphis Chamber

Tennessee Valley Authority

TVA workers install water quality monitoring wells near the Allen Fossil Plant.

Changes could be ahead for the way wells are permitted in Shelby County — changes intended, in part, to help protect the area’s drinking water.

The Shelby County Groundwater Control Board (SCGCB) has been working on updates to its permit process for months. The move to review the rules came after a controversy over some wells arose in 2016.

The board and the Shelby County Health Department approved five well permits for the Tennessee Valley Authority (TVA) in 2016. TVA hoped to pump 3.5 million gallons daily from the Memphis Sand Aquifer — the source of the area’s pristine drinking water — to cool a new energy plant here.

Protect Our Aquifer, a local advocacy group, and the local branch of the Sierra Club tried to appeal two permits issued by the board and the health department. The board denied the appeal. The groups filed a lawsuit on the matter but it was dismissed.

Corey Owens/Greater Memphis Chamber

All of it, though, raised public awareness about the wells, TVA’s plan, and the local permit process.

Public comment on the permitting process ended this week. Officials with the health department are now compiling those comments for review by the public and the members of the water control board. The board will vote on the new rules in the coming weeks.

Some of the major changes in the rules include new classifications for different types of wells (depending on how much a user intends to draw from them), siting guidelines for new wells, and limits on water use.

For example, one proposal would broaden a rule that said water pumped from only certain types of wells would be limited to “reasonable use” to include “any water well.”

Big changes could come to the way that large wells — like the ones TVA drilled — are permitted. Permits approved by the health department would be automatically appealed to the ground water board for a hearing.

Notice of those hearings would follow the same rules as many elected bodies. Notice of the hearing and information about the well to be reviewed would be published in newspapers, the Shelby County website, and it would be emailed to interested parties. The public would be invited to speak at the hearings.

Well permits would only be approved by the board if the applicant can prove that the local, public water supplier “is unable or unwilling to supply the amount of water required by the applicant.”

The applicant would also have to hire experts to prove that alternative sources of water aren’t suitable because of its chemical makeup or because there’s not enough of it.

Recently, the TVA decided to buy water from Memphis Light, Gas & Water instead of pumping water from its five wells. A coal ash pond about a half of a mile from those wells is leaking toxins into groundwater. Some fear running the wells would pull those contaminants into the area’s drinking water.

A proposed rule change says, “the proposed well will not accelerate or enhance the migration of a known source of contamination into the aquifer.”

Tennessee Valley Authority

The depth and amount of the contamination, according to the TVA investigation.