Real numbers within reach, MLGW Board approves RFP process, awaits Memphis City Council vote

Voting “yes” to an RFP opens the door to MLGW and the City of Memphis to break free from TVA and saving customers money, creating local jobs, attracting billions of dollars of local investment, and dramatically reducing the environmental impact of power generation for Memphians.

Brady Watson | October 6, 2020 | Energy Policy, Tennessee, Utilities

[Editorial note, Oct. 6, 2020: Memphis City Council voted 8-5 to reject MLGW’s RFP contract. What comes next is that Councilmember Jeff Warren moved to arrange a joint meeting between City Council and the MLGW Board to discuss the next steps.]

Today, the Memphis, Light, Gas & Water (MLGW) Board of Commissioners voted to approve a contract for a company to facilitate the process of soliciting bids from potential new suppliers of energy to Memphis. The process, known as a request for proposals (RFP) process, will allow the utility to essentially “shop around” for power, find low-cost energy resources, and assemble a portfolio of resources to power the City of Memphis and Shelby County. While multiple expert studies over the last several years have estimated up to hundreds of millions of dollars per year in savings for Memphians if MLGW bought energy from a new energy supply instead of its current supplier, the Tennessee Valley Authority (TVA), this RFP process will examine actual bids and get real prices on the table for an alternative power supply.

It should be noted that the bid process will not be examining TVA’s recent unimpressive offer as it’s a known quantity and is not part of soliciting new bids. The MLGW Board can still consider it as an option, but it will not be a part of the RFP process.

Timeline of recent events starting in August of 2020 and expected future events.

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RFP consultant expected to confirm previous cost studies showing savings for MLGW and its customers

Today’s vote to award the RFP contract to the firm GDS Associates was an important step toward Memphis potentially realizing large savings. It comes after last month’s suggestion from MLGW staff that the utility issue the RFP, which itself followed an intensive, year-long study by MLGW to gauge the feasibility of leaving TVA in favor of a new source of reliable, yet less expensive, energy supply.

The RFP will examine potential power supply options outlined in MLGW’s recently completed study, known as its integrated resource plan (IRP), and other feasible alternatives. The RFP will also seek bids to build additional transmission infrastructure to connect to any alternative power supply and to build or source renewable energy assets. As a reminder, the IRP confirmed what several studies have shown: MLGW could save hundreds of millions of dollars by making the switch to an alternative power supply and leaving TVA. By law, these savings are required to go back to customers in Memphis and Shelby County, which could go a long way in easing the city’s high energy burden. Memphis has the most unaffordable energy of any major metro area in the U.S. with some residents paying up to 25% of their income on utility bills. Memphians would benefit greatly if a portion of the savings is directed into bill-lowering energy efficiency measures, as we at SACE call for.

All eyes on Memphis City Council ahead of October 6 meeting

Before the contract can be officially awarded to GDS Associates, it must first be approved by the Memphis City Council, which is expected to vote on the proposal at their October 6 meeting. If Memphis City Council votes in favor of approving the contract, the RFP is expected to go out for bids in early 2021 and be completed by 2022. Once the RFP is complete, Memphians can expect to have a clear and accurate picture of what its alternative power options really are and how much Memphians could actually save by switching energy supplies.

Voting “yes” opens the door to MLGW and the City of Memphis breaking free from TVA and saving customers money, creating local jobs, attracting billions of dollars of local investment, and dramatically reducing the environmental impact of power generation for Memphians.

In these unprecedented times, and at this time of reckoning for TVA, it is an absolute duty to the people of Memphis that we do whatever it takes to ensure an affordable, equitable, and clean energy future for all Memphians and we strongly encourage Memphis City Council to vote “yes” and move the RFP process forward.

For updates throughout the process ahead and to dive deeper into what’s happened so far, visit MemphisHasThePower.org. If you haven’t already, please sign our petition to show Memphis leaders you demand affordable, equitable, and clean energy for all!

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Brady Watson
Kansas native Brady Watson attended Kansas State University where he received a bachelor’s degree in History, and then a master’s degree in Documentary Film and History from Syracuse University.  After…
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