Press Mention WREG News 3 May 25, 2020
Topical Mention
Answers on whether Memphis should switch energy providers available this week
In this mention
Memphis city officials are examining whether the city's utility, MLGW, should switch from the Tennessee Valley Authority to a cheaper power provider. A study examining the feasibility of the switch is expected to be completed by Friday. The article discusses the potential $450 million annual savings against the costs and complexities of leaving TVA, including a five-year penalty clause in the current agreement.
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Full transcript
by: Greg Hurst
Posted: May 26, 2020 / 04:02 PM CDT
Updated: May 26, 2020 / 06:16 PM CDT
MEMPHIS, Tenn. — The results of a study to examine if the city of Memphis can move to a cheaper power source for Memphis Gas, Light and Water will be available later this week.
MLGW has been buying power from the Tennessee Valley Authority since 1939.
"They have been a great partner to us," Councilman Frank Colvett, Jr. said. "But like all things, in every family budget and every family business, if you can get the same exact product for less, why are you not taking it?"
Some lifelong Memphians started an online campaign for the utility to part ways with TVA.
"I'm happy that they're doing that because there needs to be another voice other than TVA out there, sharing information." Councilman Martavious Jones said.
On their website, '$450 Million for Memphis', the group argues the city could hire a larger power supplier, offering reliable service at a lower rate and save up to $450 million dollars a year.
However, some argue the issue is in the details of MLGW leaving TVA.
"It's not just a simple discussion or simple choice as flipping the switch and going to another company," Jones said. "There are other costs that we have to factor."
Leaders have to look into how reliable the new source would be and how much it would cost to bring that power to Memphis.
"They have to get across that big waterway call the Mississippi," Colvett said. "So, lots of different pieces to this that are working that again. It's not as simple as 'hey, should we switch?'"
In the agreement with MLGW and TVA, TVA has a prenup requiring Memphis to pay the TVA for 5 years after the break-up.
"I liken it to you're looking to move into a new home, but you have to pay two house notes for five years. That's a burden. Do we really want to put that burden on people here in Memphis?" Jones said.
MLGW's advisory team has been looking for answers and will hopefully have them by Friday.