The Commercial Appeal Editorial Board, David Waters
Your electric bill is going up, thanks to a small Memphis Light, Gas and Water rate increase approved last week by Memphis City Council.
If TVA (and by extension MLGW) gets its way, your electric bill will keep going up, no matter how many LED bulbs, Energy Star appliances or solar water heaters you install.
Energy efficiency might be good for the planet, but it’s not so good for TVA, working to overcome decades of costly mistakes that created a power grid built for an energy-inefficient society.
Our efforts to reduce our energy consumption are cutting into TVA’s bottom line, and some say the long-term reliability. The more we go green, the less green we’ve been sending to MLGW (Memphis), NES (Nashville), KUB (Knoxville) and 151 other local power companies in the TVA system.
Since 2011, as TVA has tried to remain competitive by cutting prices to its industrial customers, it has tried to prop up its bottom line by increasing “mandatory fees” to local utilities that serve 9 million residential customers in 7 states.
TVA also is planning to add a “grid service charge” to the electricity it sells to local power companies. That charge will be passed along to customers.
As TVA shifts its costs to residential customers, MLGW and other local power companies are trying to adjust, often by raising their mandatory fees – the monthly fee every residential customer pays just to plug in to the grid.
Since 2011, KUB’s monthly service fee has increased from $8 to $17.50, NES’s from $10.01 to $15.30, and MLGW’s from $9.49 to $11.60.
MLGW has done a better job holding the line, thanks in large part to a 2003 bond deal that locked in half of MLGW’s electricity needs for 15 years at a significant discount. That deal expires this year.
MLGW already loses millions of dollars each year in uncollected utility debt and utility theft – both a direct result of the city’s high poverty rate.
Poverty and poorly insulated housing present another challenge. Customers served by MLGW enjoy some of the lowest utility rates in the country, and yet Memphians incur one of the country’s highest energy burdens.
The average MLGW family uses twice as much of its annual income as other families around the country to keep the lights on, according to the Southern Alliance for Clean Energy.
TVA could have helped to ease that burden, but it chose to spend $50 million providing “Extreme Energy Makeovers” to low-income housing in several other cities, but not Memphis.
Instead, MLGW customers “Share the Pennies” to generate weatherization grants for low-income homeowners, but it will take 100 years to meet the need at current funding levels.
Raising monthly mandatory fees will only add to the local energy burden. But if TVA keeps shifting its burden from industrial to residential customers, those monthly fees will keep going up – no matter how low we set the thermostat.
As TVA’s largest customer, city-owned MLGW can do something about that. The Memphis City Council, MLGW board and incoming MLGW president J.T. Young have leverage, as columnist Ted Evanoff notes in Sunday’s business section.
Memphis sits on the western edge of the TVA system. MLGW could buy power from other sources without using TVA transmission lines. All we have to do is give TVA five years notice and start shopping for a better deal.