MEMPHIS, Tenn. — Memphis Light, Gas & Water is proposing a 12% rate increase for three years beginning in 2024 as it starts on a $1.2 billion project to improve the region’s electrical system.

The proposed rate increase had previously been 10.5% over three years. MLGW said it would amount to about $5 more a month for the average customer’s electricity with no increase for gas or water.

The utility company already has invested $172 million with the goal of reducing power outages and making the electrical system ready for new, large-use customers, President and CEO Doug McGowen told MLGW board members Wednesday.

It also proposed adding 100 megawatts of battery storage to provide extra energy during peak demand, along with integrating wind turbines and solar energy into the grid.

MLGW says even with the increase, average bills will remain the lowest in the country, among utilities surveyed. They offered this graph as a comparison:

The board will vote on a proposed annual budget Oct. 18.

There is still the issue of trust as some customers are having their utilities estimated because of broken meters or other reasons. We have covered cases in which customers were billed tens of thousands of dollars.

MLGW told us they encourage customers to contact them if they get a high bill because they’ve been having an issue with gas and water meters, which sometimes requires them to send an estimated bill.

“Estimations have been around since utilities have been in existence. As you know, when we had manual meter readers, there was a time when there was a dog in the yard, and they couldn’t go in. In those circumstances, we always had to estimate the bill,” said McGowen. “There is actually a dispute process and customers are taking advantage of that, coming to us to talk about it.”

Also on Wednesday, MLGW said it is planning to move its operations from 220 S. Main Street in downtown Memphis to a larger, 64-acre facility in the greater Memphis area.

The cost for the new facility is estimated at $31.4 million. MLGW said the move would eliminate a planned $50 million renovation for the Main Street site.

The new location was not disclosed.