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MLGW board rejects long-term partnership with TVA

Memphis Light, Gas, and Water will remain on a five-year rolling contract with the TVA; move pleased opponents of the deal who spoke at meeting.

MEMPHIS, Tenn. — Wednesday morning, Memphis Light, Gas, and Water (MLGW) board unamimously rejected a long-term partnership with the Tennessee Valley Authority.

Instead, the utility will remain for now on a five-year rolling contract with the TVA, and the rejection of a long-term agreement means the Memphis City Council will not have to take a separate vote.

After the vote, MLGW Board Chairman Mitch Graves said he and other board members rejected the deal, mainly because of its length.

"I think had it been a 10-year term, we'd have looked at this a lot different. But 20 years, 20 years rolling, was too much," Graves told ABC24.

The vote pushed back against recommendations by a consultant group and now-former MLGW J.T. Young to approve a 20-year agreement to continue buying power from the TVA through the year 2048. 

The deal - if approved - would have included a 3.1% base rate decrease, but a TVA spokesperson said since the deal was rejected, the company is committed to holding rates steady for the next decade, following the past four years of no rate increases.

MLGW was forced to push the original November 16 vote date back after an appeal was made. The company said voting would not take place until the appeal process was closed, but it did not detail what the appeal was for. 

Opponents of the deal - who spoke before the Wednesday vote - were thrilled.

"This is what people power looks like," Memphis Community Against Pollution President Justin J. Person said.

"We are just so excited that we broke through on this issue," Protect Our Aquifer Executive Director Sarah Houston added. "We have been adamant for months that TVA's never-ending contract is a bad deal for Memphis."

The citizens who spoke out are hopeful MLGW can now leverage changes with the TVA, including how coal ash is driven across Southwest Memphis and dumped and the potential expansion of renewable energy.

"Now we can move into negotiation as it relates to the benefits for our community so that the Tennessee Valley Authority is held accountable for caring for our community now and into the future," Pearson said.

Doug McGowen will take over as the new MLGW President and CEO next week. 

MLGW is the TVA's largest customer, and it has supplied power to the Memphis area for more than 80 years. MLGW services more than 400,000 customers, making it the nations largest three-service utility company.

TVA released the following statement: 

"The MLGW Board of Commissioners voted today to conclude their nearly four-year evaluation of long-term energy supplier options and continue their relationship with TVA.

This process began with a broad stakeholder Power Supply Advisory Team (PSAT), followed by an Integrated Resource Plan (IRP), which led to the current Request for Proposal (RFP) phase.

We have been respectful and supportive of the process, and we are glad to see it come to a successful resolution. MLGW’s process has been a thorough, disciplined, and unbiased consideration of potential energy suppliers.

MLGW’s decision is a reinforcement of the longstanding relationship with TVA in delivering affordable, reliable, and clean energy to the people and communities across Memphis and Shelby County.

'We are proud of our partnership with MLGW and we are excited to move forward,' said TVA Executive Vice President and Chief External Relations Officer Jeannette Mills. 'We believe the people of Memphis and Shelby County deserve a partner that cares about serving their needs and addressing real issues like energy burden and revitalization of the city’s core communities.

'We believe that our partnership with MLGW provides the best option for making this happen.'

We look forward to working with incoming President and CEO Doug McGowen and building upon our 80+ year partnership as MLGW further considers the long-term option.

In the meantime, we will continue making investments and enhancing our presence in the community as we committed to doing at the start of this process.

'TVA proposed several commitments to further enhance our investment in Memphis and Shelby County. We are excited to move forward with those investments and build on our local partnerships now that MLGW’s thorough assessment is concluded,' said Mark Yates, TVA west region vice president. 'This is a positive step forward for all of Memphis and Shelby County.'"

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