Claiming billions can be saved, TVA’s largest customer looks to begin courting other power suppliers

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MEMPHIS, Tenn. – Claiming billions can be saved, TVA’s largest customer looks to begin courting other power suppliers.

Memphis Light, Gas & Water (MLGW,) the largest customer in the Tennessee Valley Authority’s (TVA) portfolio, could soon find another source to keep the lights on.

Wednesday, staff recommended to the MLGW Board of Commissioners to explore the possibility of finding a new energy supplier. The utility provider has contracted with TVA for 80 years, and claims to be TVA’s largest customer, representing 11 percent of TVA’s total load, with nearly 431,000 electricity customers.

SACE says a recent study estimates savings could total billions of dollars over the next 20 years, while also creating clean energy jobs and gaining billions of dollars in local investment. In a press release, SACE says switching would mean “MLGW would save perhaps 12-15% on costs — a portion or all of which is expected to be passed back to customers — gain nearly $3 billion in local capital investment, and cut harmful carbon emissions by nearly 40% compared to TVA’s energy supply.”

SACE Executive Director Stephen A. Smith says, “By seeking bids on alternative power supplies, the people of Memphis and Shelby County will lock in lower cost and cleaner more efficient energy-giving Memphis more control of its own future. This also serves as a significant ‘shot across the bow’ to TVA that MLGW is setting the stage to break loose from TVA’s dictatorial long term contract arrangements.”

A press release from SACE says MLGW President J.T. Young recommended that the Board of Commissioners issue a request for proposal to find a new energy supplier, but it’s unclear if the board will act on the recommendation. Nevertheless, the release says Young spend the next one to two months hiring a consultant to manage the process, expecting that if approved by the the MLGW Board and the Memphis City Council this fall, then the process could officially kick off in October.

It’s not the first time MLGW has looked to alternate energy providers. The utility entered into a non-binding “letter of interest” with Nuclear Development LLC in Jan 2018, which planned to bring to life the dormant and unfinished Bellefonte nuclear power plant in Jackson County. But TVA said Nuclear Development couldn’t meet contract terms to complete the sale. After TVA pulled the plug on the sale, Nuclear Development sued, asking a federal judge to either compel the sale or have TVA refund money the company had already spent. That case remains pending, currently set for trial in December.

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