Memphis Gas, Light & Water likely to stick with TVA for energy
Two men remove a tree downed during a Feb. 3 ice storm in Shelby County – a storm that knocked out power for up to a week, in some areas of Memphis. (Photo: Karen Pulfer Focht)
Memphis Gas, Light & Water is considering keeping the Tennessee Valley Authority as its energy provider for another 20 years, to the dismay of community activists critical of TVA’s treatment of low income communities of color.
On Thursday morning, MLGW made its “grand reveal” of vendors to potentially replace an 80-year partnership with TVA, whose biggest customer is MLGW, in order to provide lower power costs to its customers.
This summer, Memphis residents received bills that had increased by as much as 40% due to TVA’s increased fuel rates and increased energy consumption, according to MLGW.
But despite having options for potential new energy providers, an MLGW consultant said all the data pointed to TVA as still being the cheapest option, and its CEO, J.T. Young, recommended the board sign a long-term deal.
For environmental and community activists looking to push TVA into addressing pollution in Memphis, this was a bad sign.
“It was mentioned multiple times throughout the presentation today by commissioners that periodic evaluations on our power supplier are really a best practice, and going with a never-ending, always renewing, 20-year contract, MLGW would give up the ability to do those periodic evaluations, so that’s kind of the first red flag,” said Sara Houston, executive director with Protect Our Aquifer.
Over the past few months, the Protect Our Aquifer, Tennessee Chapter of the Sierra Club and Southern Alliance for Clean Energy organizations have been urging TVA to reevaluate its current planto store coal ash in South Memphis, which is primarily composed of low-income communities of color.
The decision came after TVA first learned in 2017 that toxins from the now-defunct Allen Fossil Plant were seeping into a shallow clay layer directly above the Memphis Sand Aquifer, from which the city draws its drinking water.
While TVA urged haste in moving the coal ash before the aquifer was polluted and informed Memphis officials in 2021 that South Memphis was chosen. Residents in South Memphis, specifically the Whitehaven community, will now deal with years of trucks carrying and storing coal ash near their homes.
Also pertinent is the TVA-operated Allen Combined Cycle Plant, which is currently drawing water from a wellfield located above Memphis’s natural source of drinking water. While there is a shallow clay layer protecting the Memphis Sand Aquifer, environmentalists worry that contamination from the plant could seep into the aquifer.
TVA later responded to the use of water by the Allen plant and explained that while they have permits to draw from the aquifer, water instead is purchased from MLGW and drawn from on-site water tanks.
Protect Our Aquifer has not taken a stance on whether or not MLGW should end its contract with TVA, but the organization is asking MLGW to consider shorter contracts that would “ensure we still have leverage to have adequate coal ash clean up and movement, and that we have investments in renewables locally, not somewhere in TVA’s service area,” said Houston.
Memphians paid high energy bills this summer in part due to the “volatile nature” of natural gas prices, which were affected by the war in Ukraine, export creating more demand and other geopolitical factors, factors noted in TVA’s board meeting on Wednesday.
But despite this, TVA staff expected increased production of natural gas to decrease the price, and that geopolitical issues will settle down.
“But within that there will be spikes. If we have a really cold winter this year, then that’s going to drive this volatility up, and if we have a mild one, it will drive it down pretty rapidly as well,” said John Thomas, TVA chief financial & strategy officer.
TVA staff also discussed incentives offered to MLGW, including low prices, resilience of TVA’s power infrastructure during extreme weather, and promises to increase their presence in Memphis.
“MLGW is completely in their right to test the market,” said Jeff Lyash, TVA chief executive officer.
“We propose to invest $100 million over 10 years for energy burden reduction and economic development in those distressed, poor communities, and those elements of that offer are not contingent upon signing any long-term contracts,” he added.
Following the MLGW board meeting, Protect Our Aquifer members said they plan on petitioning staff to increase the public comment period from 30 days to 90 days in order to give Memphians time to receive pertinent information.
“It took them four years to make this decision and we only get 30 days, that doesn’t seem fair or just,” said Justin J. Pearson, a community activist and co-founder of Memphis Community Against Pollution.
They challenged the idea that TVA provided the cheapest options for power and that TVA’s current portfolio provided a diversity of renewable options.
“The myth is that TVA has a diversified portfolio. They don’t. Only 3% of their portfolio are renewables, and instead of addressing the question asked by one of the (MLGW) commissioners, (They were told) they had a lot of carbon-free options in their portfolio, which is not the same as renewable,” said Pearson.
TVA’s generation portfolio is 39% nuclear, 19% coal, 26% natural gas, 11% hydroelectric, 3% wind and solar, and 1% energy efficiency programs with a total capacity of 33,727 megawatts, according to TVA.
Before MLGW chooses their next provider, Protect Our Aquifer members urged them to consider participating in the Inflation Reduction Act, which is providing tax credits to give incentives for renewable-energy infrastructure, and providers that will reduce energy burdens on low-income communities.
“We deserve additional negotiation power and we deserve additional renewables that are going to reduce reliance on aquifer water and benefit homeowners in Memphis,” said Houston.
Following the public comment period, MLGW staff will issue another recommendation to the board for final approval, which will then head to the Memphis City Council for approval or rejection.
Protect Our Aquifer will also review the newly released list of vendors.
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