MLGW seeks city approval for utility rate hikes in 2020

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MEMPHIS, Tenn. — Memphis Light, Gas and Water says customers could see utility rates rise next July, but also see better service, if an increase is approved by City Council.

The utility’s board is recommending a 2020 budget that would increase electric rates by 4.2%, with 1.5% increases in 2021 and 2022. Water rates would rise 15% next year, with increases of 7% in 2021 and 5% in 2022. Gas rates would also increase in 2022.

MLGW President J.T. Young said customers would be paying an estimated $9 a month more for electric, $4.33 a month for water and 74 cents a month for gas.

The rate increases are needed to fund about $1 billion in capital improvements, and MLGW’s board says the increases are needed to keep the utility financially sound, according to documents submitted to City Council.

MLGW say the improvements will reduce the time MLGW spend without power during outages. According to a survey taken by MLGW, 62% of respondents said they would be willing to accept a small rate increase for better service, officials told council.

“We’ve worked to find ways to make sure that what we ask for is what we absolutely needed,” Young told a City Council committee Tuesday.

Young said MLGW has also identified about $91 million in savings, including a phased-in reduction in staff of between 11 and 13% over time.

Young told council MLGW utility rates have been the lowest in the nation on average for four of the past seven years. Last year, council approved a small water rate increase, but council members rejected a proposed increase for electricity.

City Council will have to approve the budget for it to go in effect. It is set to go before the full council in two weeks.

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