MEMPHIS, Tenn. — Memphis Light, Gas & Water’s board on Wednesday approved a 12% electricity rate increase for three years beginning in 2024.
Gas and water rates would remain the same. MLGW’s budget must be approved by the City Council before it goes into effect.
MLGW President and CEO Doug McGowen will go before the council in November. If approved, customers would see the increase in their January bill.
“I expect robust dialogue,” McGowen said. “City Council is the rate making body that represents the constituents.”
McGowen says for an average 1,000-kilowatt-hour customer, which is about a modest size Memphis home, that’s about $5 per month increase on your on your electric charge on your bill.
The company is starting on a $1.2 billion project to improve the region’s electrical system reliability after numerous power outages. The electrical increase will fund more tree trimming and work on substations so more people don’t lose power.
“A lot of work will be happening at our substations, which is hard to see. But I want to remind everybody, with 6,000 or more substations, if one of those goes out tens of thousands of customers lose power. So we’re really talking about the absence of an outage is what you’re going to see,” McGowen said.
MLGW says even with the increase, average bills will remain the lowest in the country, among utilities surveyed.
Paying more isn’t a popular pitch, but with recent power outages and failed systems, many say something has to be done. McGowen says the benefits outweigh the cons.
“We’re talking about day to day reliability, where people say it’s a blue sky day and why our power went out. We’re really aiming to decrease that significantly with these investments,” he said.
McGowen says the electric rate increase will not be used to fund MLGW’s move to a new building in East Memphis and there has been a steady surplus in the gas division that is helping fund that move.
MLGW’s board also approved purchasing 65 acres in Cordova for $31.4 million to establish a new headquarters, replacing the one on Main Street.