With all due respect to The Clash, Memphis has an important decision to make. The City/utility can save hundreds of millions of dollars and receive cleaner energy by leaving TVA for an alternative power supply. SACE filed comments on the MLGW draft long-term resource plan or IRP to help inform that decision.Bryan Jacob | July 7, 2020
When Memphis Light, Gas and Water (MLGW) first released its draft IRP (Integrated Resource Plan) prepared by Siemens, SACE commented that “The report shows MLGW’s lowest-cost option for power is also the cleanest. Of the many scenarios that MLGW’s contractor examined, the lowest-cost energy portfolio would get MLGW up to 75% renewable energy, and cut carbon pollution by 50% compared to TVA levels, resulting in better public health, cleaner air, and cleaner water.”
This is borne out by nearly 400 pages of detailed analysis with rather conservative assumptions that likely underestimate the true savings potential. One of Siemens’ primary recommendations is for a Request for Proposal (RFP) “to confirm all estimated savings before making a final decision.” SACE strongly agrees with this recommendation. A competitive-solicitation RFP is the best way to validate or refute the assumptions and update the savings estimates with real, market-based quotations.
SACE Comments on MLGW IRP
The comments SACE submitted on the MLGW’s IRP elaborate on five main points:
- Siemens and Midcontinent Independent System Operator (MISO) make a strong case for MLGW to leave the Tennessee Valley Authority (TVA)
- The MLGW Board should recommend (and the Mayor and City Council should approve) a set of complementary competitive bid procurement processes
- City Council should ensure a just and equitable energy supply for Memphis by committing to investing the savings in programs that will lower energy burdens
- The Siemens report gives every benefit of the doubt to TVA
- TVA and MLGW should prepare to negotiate a win-win departure
Key Excerpts from those comments include:
- MLGW’s lowest-cost options for power are also the cleanest.
- Each of the ten portfolios [where MLGW leaves TVA] all include 1,000 megawatts (MW) of local renewable energy in or around Shelby County. [Staying with TVA will restrict MLGW to only 1/5 of that local solar capacity.]
- SACE strongly agrees with the Siemens recommendation that “[a]n RFP should be undertaken by MLGW to confirm all estimated savings before making a final decision.”
- SACE recommends three complementary procurement processes, with coordinated evaluation.
- Memphis has the power to deliver considerably more financial savings to its community through low-cost energy efficiency, which is key to reversing unaffordable customer energy burdens that are historically the highest of any major metro area in the nation.
- Memphis has an opportunity to substantially increase energy efficiency investment and benefits for customers, possibly funded in part by a portion of the estimated $153 million per year in savings projected from an alternative power supply.
- Even with conservative assumptions throughout the modeling, portfolios with substantial amounts of renewable energy, far in excess of the TVA portfolio, emerged as the least cost and otherwise best options.
- TVA stands to gain by negotiating the sale or sharing of the Allen Fossil Plant, negotiating the sale or sharing of some transmission assets, and remaining at least partially connected to MLGW for reliability purposes.
RFP would replace speculation with real project quotes
TVA has responded to the draft IRP by saying it expects to provide a cleaner portfolio than MISO – yet the utility has not established a firm commitment or goal of reducing total carbon emissions. And although MLGW has the opportunity to save hundreds of millions of dollars by switching to an alternative supply, TVA has also downplayed these savings by bringing up speculative cost differences related to asset construction and timeline. An RFP would replace these speculations with real project quotes.
We urge City Councilmembers to get real numbers on the table for how much Memphis, MLGW, and its ratepayers could save by leaving TVA and switching to another supply that could provide, more affordable and cleaner energy to Memphis, a city suffering from unaffordable energy bills or energy burden, by issuing a comprehensive RFP.
Read more and take action in Memphis at MemphisHasThePower.org.