MEMPHIS ENERGY ANSWERS

Where does Memphis’ electricity come from?


MLGW is considering finding a new energy provider because several studies have shown that this could save Memphis hundreds of millions of dollars per year.




Why would MLGW look for a new energy provider?


MLGW is considering finding a new energy provider because several studies have shown that this could save Memphis hundreds of millions of dollars per year.




Where else could MLGW get energy?


MLGW could buy energy from wholesalers other than TVA and/or build its own energy generation capacity. In MLGW’s analysis, they found the cheapest power available would be from new solar farms in Shelby County if MLGW were to leave TVA. Local solar could provide part of Memphis’ energy needs--perhaps 15% or more--but the rest would need to be brought in from outside Shelby County or produced at local gas power plants.




What is MISO?


MISO, Midcontinent Independent System Operator, has been identified as a potential source of energy for Memphis if MLGW leaves TVA. MISO is an independent, not-for-profit organization that delivers electric power across 15 U.S. states and the Canadian province of Manitoba, including in Arkansas and Mississippi, right across the border from Memphis. MISO is not an energy generator itself, but rather coordinates and delivers energy across its transmission lines for its members.




Would my bill be lower if MLGW switched energy providers?


If MLGW switched energy providers, it could mean hundreds of millions of dollars per year in savings, community-wide. Those savings would need to be returned to customers by law.




If MLGW switches energy providers, will we pay our bill to someone new?


No. If MLGW gets its power from a different provider, you would still just pay one bill to MLGW for any electricity, gas, or water service.




Would the savings of leaving TVA outweigh the costs?


Multiple expert studies, including by MLGW, show that the savings of leaving TVA far outweigh the costs, such that Memphians would save $120 million or more per year. One major cost of leaving TVA might be the construction of power transmission infrastructure, but the estimated $120 million or more per year already includes the cost of possible transmission. If it were determined through further analysis that MLGW should build transmission lines or other energy infrastructure to facilitate a departure from TVA, it would be an investment in major economic development and local jobs, fully paid for by the savings from less expensive power. If MLGW were to invest in new assets to help realize the potential of lower energy costs, the costs could be spread over several decades, and could give Memphis more equity in its energy supply, allow it to pay lower annual costs, and build valuable assets.




What is a utility?


A utility is an organization that provides a service to a certain city or community. Some utilities only provide one service, but in the case of Memphis’ utility, Memphis Light, Gas and Water (MLGW), it provides electric, gas, and water services to customers in its service territory.




What is an IRP?


An IRP, integrated resource plan, is a utility’s plan for how it will generate power for a set period of time. A utility looks at its service territory populations, the price of energy and other factors to determine how much energy it will need, and how it will provide that energy. Those energy sources can be sustainable for its customers and include renewable energy sources like solar and energy efficiency, or they can be non-sustainable and include outdated and dirty energy like coal and gas. Typically, utilities release IRPs every 2-3 years and look 10-20 years into the future. MLGW recently completed its first-ever IRP, which was a thorough evaluation of whether or not it might make sense to find a new supply of energy. The IRP findings were conclusive that the potential savings by leaving TVA could be very high and that MLGW should solicit bids from potential suppliers in order to verify the potential savings.




What is an RFP?


An RFP, request for proposals, is something utilities and other organizations release when they are looking at options for accomplishing a certain task. Then, different companies can submit their bids to meet that task. For example, MLGW is expected to put out an RFP, asking for bids on providing power to Memphis, which will give concrete numbers for how much Memphians can save by moving from TVA to another power provider.




Would a new energy supply be reliable?


Yes. If MLGW were to leave TVA, any alternate energy portfolio would have to meet high reliability standards.




How long will the RFP take?


The RFP process will entail soliciting bids from potential suppliers of energy and transmission, and then evaluating the bids and assembling them into a cohesive portfolio. This entire process will take until late 2021 or early 2022. Once the evaluation is complete, Memphians can expect to have a clear and accurate picture of what its alternative power options really are and how much Memphians could actually save by switching energy supplies. At this point, MLGW and City Council can decide whether to stay with TVA or leave. If MLGW decides to leave TVA, because of its current contract, TVA will remain Memphis’ energy supplier during the 5-year exit period.




Who can I contact to voice my opinion?


Sign the petition at MemphisHasThePower.org. You can also call or email your City Council member, whose contact information is here. Memphis City Council will have to give final approval on any decisions that MLGW makes.




What about all the economic development and investments TVA has made in Memphis?


While TVA has made more investments in Memphis recently, historically that has not been the case. In fact, TVA CEO Jeff Lyash even admitted as much recently: “I don’t think TVA has had the presence in Memphis that Memphis deserves.” Additionally, many of the new benefits TVA is offering are contingent on MLGW not issuing an RFP to explore other options. By switching to a new energy supply and generating some of its own power, MLGW would save perhaps 12-15% per year on costs, — a portion or all of which is expected to be passed on to customers — gain nearly $3 billion in local capital investment, and cut harmful carbon emissions by nearly 40% compared to TVA’s energy supply. The portfolio of energy resources that MLGW is eyeing is comprised of 75% renewable energy–mostly solar–which means less pollution in the area, and the ability for Shelby County to become a leader in solar energy production, and solar energy jobs.




What’s the deal with TVA’s new contract they would like MLGW to sign?


MLGW currently gets its power under a contract with TVA (the Tennessee Valley Authority). The agreement is “evergreen” which means it renews automatically unless MLGW gives TVA 5 years’ notice that they plan to leave. The new contract that TVA is trying to get local power companies all over the region, including MLGW, to sign would increase the lock-in period so that MLGW would have to give a full 20 years’ notice if it were to want to leave TVA! The new contract would limit Memphis to sourcing just a few percent of its energy from local solar, whereas leaving TVA could mean 15% of its energy would come from local solar.




Could MLGW own its own energy generation assets if it left TVA?


Currently, MLGW cannot generate its own energy and it would only be able to generate a small portion of its energy under the new contract TVA wants MLGW to sign. MLGW could, however, build its own energy facilities like solar and gas if it breaks away from TVA, though most of its energy (or even all of it) will likely be purchased from new suppliers. Importantly, If MLGW were to leave TVA it would also have more ability and freedom to run energy efficiency programs to reduce customers’ bills and avoid the need for some costly energy generation in the first place.





© 2020 by Southern Alliance for Clean Energy