MLGW chief tells City Council it’s time to raise utility rates

MEMPHIS, Tenn. — The president of Memphis Light, Gas & Water told City Council members Tuesday that the utility has to raise rates or it will run out of cash.

"That's a big problem," Jerry Collins said. "It’s been a long long time since we’ve had a rate increase for gas and electric ... We have some of the lowest utility rates in the country. It’s very important we as a community are responsible and how we make sure that we properly find the utility so we can give citizens the services they need."

The proposed options for utility rate increases (see below) will be up for a vote at the next council meeting in two weeks.

Proposed Water Rate Increase

  • Rate to increase 1.05 percent in 2018, generating $1 million for aquifer research

Electric Rate Options

  • A) 3.5 percent increase in 2018 and 2019, generating $87.2 million
  • B) 7.1 percent increase in 2018, generating $86.4 million
  • C) 2.3 percent increase in 2018, 19, 20, generating $86.9 million

Gas Rate Options

  • A) 4.5 increase in 2018 and 2019, generating $20.6 million
  • B) 9.2 percent increase in 2018, generating $20.6 million
  • C) 3.0 percent increase in 2018, 19, 20, generating $20.8 million

Collins said Memphis has some of the best tap water in the country and MLGW wants to keep it that way.

A proposed 1 percent water rate increase would help fund a study on the Memphis Sand Aquifer, which supplies fresh water to the region. Toxins have recently been found in groundwater, though not in the aquifer.

Council member Janis Fullilove said she was concerned about the burden being put on low-income residents who couldn't afford utility bills.

Collins said that the average utility bill is $34 less expensive today than it was for customers 10 years ago.

Council member Worth Morgan said the MLGW discussion was the biggest issue the council had addressed in months.

"This is really critical. We’re talking about the aquifer. The future of the financial stability of MLGW."

MLGW customers, however, were critical of the proposal itself.

Customer Shelley McKee says she's not in favor of rate increases.

"It comes up every couple years. It always seems to go to the people who pay for it. We get stuck with it"

Joshua Cowan, an artist, said, "Once you increase the rates, it’s hard for people to meet that standard."