MLGW postpones decision on leaving TVA ‘indefinitely’

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MEMPHIS, Tenn. — Memphis Light Gas and Water will postpone any decision over whether to leave electricity supplier Tennessee Valley Authority indefinitely, MLGW President J.T. Young said Wednesday.

The move came amid a lengthy decision-making process where the utility was soliciting plans and input from other suitors. Some special interest groups said MLGW could save around $500 million a year, savings which would get passed on to customers. In a final report made last August, the MLGW Board of Commissioners estimated they could eventually save up to $283 million a year by switching to the Midcontinent Independent System Operator, better known as MISO, whose service areas include parts of Missisippi and Arkansas.

“This was being driven by the notion of savings,” Young said.

But the conversation chilled two weeks ago when a dangerous winter storm hit much of the South.

“There was consideration into what happened in other markets,” Young said.

He was referring to forced outages reported by other utilities including MISO, when usage hit highs rarely seen in February.

MISO released the following statement to WREG: “Controlled outages are rare and our goal is to minimize the impact on communities. For example, the temporary power disruptions MISO instructed across its South Region (AR, LA, MS and TX) last week lasted a little more than two hours.”

In contract, Memphis customers never lost power and were not asked to reduce usage during the snow and ice storms.

“They did well,” said Memphis Councilmember Patrice Robinson, who leads Council’s MLGW committee.

She said she always favored staying with TVA, at least for now, so the city can focus on upgrading its infrastructure including poles, wires and pipes, all necessities highlighted even more by the week-long boil water advisory.

“We do know we have to spend a lot of time with time, energy and the council has approved now a budget over the next five years so we can make improvements to our system,” Robinson said.

Young said he wants to focus on such infrastructure improvements rather than electricity suppliers.

“As we thought about improvements we need to make on our electric system as well as water and gas system, we want to be able to be single-minded about that,” Young said.

Councilmember Jeff Warren said he still wants to see clearer figures for the cost of switching away from the TVA.

But ultimately, the final decision is up to MLGW. Young left open the possibility for revisiting this topic in the future.

TVA said in a statement that they still believe they offer the “best overall value” for Memphis.

“TVA has been supportive of MLGW’s process to evaluate their long-term power options – and we will continue to do so. MLGW’s process has been both thorough and comprehensive.

“However, we firmly believe that TVA’s partnership with MLGW provides the best overall value for the people of Memphis.  That value includes low cost, reliable energy; economic development; environmental stewardship; and community support.

“We are committed to working with MLGW and the City of Memphis as we move forward to serve the people of Memphis and Shelby County.”

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