MLGW Takes First Step In Power Supply Decision


Memphis Light, Gas & Water (MLGW) president and CEO J.T. Young recommended to the utility’s board Wednesday, August 19th, that it should find a consultant to help find a possible new power provider, a move that could shift MLGW away from the Tennessee Valley Authority (TVA).

Young said he intended to issue a request for proposals (RFP) to companies that would help MLGW’s leadership team to manage the process of finding a new power supplier. That is, the MLGW leadership team will hire a team to help them find a new power supplier.

The recommendation came during the MLGW board meeting Wednesday morning. It came after about two years of debate as to whether or not the utility should stay with TVA or find a new supplier.

That decision presented itself as some are critical of TVA for not investing in Memphis as it does in other cities, even though MLGW is TVA’s largest customer. Different groups have also projected that MLGW could save between $220 million and $450 million every year by switching away from TVA. MLGW hired Siemens to review the savings and they concluded MLGW could save $130 million each year.

Young’s recommendation could be a monumental first step away from TVA. Memphis’ energy has come from TVA for 80 years. MLGW spends about $1 billion each year to buy electricity from TVA.

MLGW board members did not vote on the recommendation Wednesday. The main criticism of the process from board members was that it was not moving fast enough. Mitch Graves, the MLGW vice board chair, wanted Young and his team to just hire a consultant, rather than opening it up to a bidding process. That process would only add time, he said, and he trusted Young to hire a good firm.

“The longer we push this out there … there are savings, there’s money on the table,” said Mitch Graves, the MLGW vice board chair. “Every week, every month, and every year that goes by, we’re leaving money on the table for our citizens.

“We started this journey and have been in it for while. If you need help, get the help and move on. Don’t spend another three months on finding your help. They’re out there and they do this every day.”

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