MLGW should really do their research before leaving TVA

I recently read that Memphis Light Gas and Water (MLGW) was considering alternatives to continuing their relationship with TVA. Beware Memphis Businesses and Residents, the grass is not always greener on the other side of the fence.

I’m a business owner and resident in Paducah, Kentucky. The growth of our business is largely dependent on operating in a growing community that has positives to offer business and residents, one of which is competitive and plentiful electrical power.

In 2009, Paducah Power Supply (PPS) decided to discontinue its contract to buy power from TVA by giving a 5 year notice. The result of that decision was Paducah went from having some of the least expensive power rates in Kentucky to having some of the most expensive.

The PPS Board listened to “Wolves in sheep clothing” promoting a 30% decrease in power cost by investing in a “new and improved” coal fired power plant. That plant came in at 2 1⁄2 times the projected cost and saddled our 22,000 power customers with over $600,000,000 in debt.

That equates to approximately $30,000 per customer, as opposed to TVA debt being less than $3000 per customer. This doesn’t even account for the future expenses of owning a generating plant, such as O&M, capital investment needs and regulatory requirements.

PPS had been a TVA customer for over 50 years supplying our community with competitive power rates as well as good paying jobs, revenue in lieu of taxes and economic assistance in recruiting and maintaining industry and has been a highly visible part of our community. The out of state plant and owners have no visibility in our community, nor do they make any investment in the improvement of our town.

The PPS Board of Directors bought a bill of goods when they were told TVA was not working with them, charging too much and they could do better by becoming a power producer rather than just a power distributor. Of course none of this was true, but the PPS board bought it.

Here are a few results of that decision:

1 The projected 30% decrease in power cost became a 30% plus increase in cost.

2 Loss of all economic assistance from TVA in securing new industry for our region.

3 Liability for PPS because of being an owner of a power plant and coal mine and assuming the obligation to serve.

4 The negative impact on Businesses and residents of Paducah has been huge and we are committed for another 25 years.

5 The PPS Board and City management have agreed that leaving TVA was a huge mistake.

6 The loss of in lieu of tax revenue which was a huge part of the local school system budget.

The decision by the PPS Board was made in 2009, unfortunately it was 2014 before the results were felt and the businesses and citizens realized what they had been saddled with; but, by then it was too late to change.

Needless to say the ratepayers went into immediate shock when they started receiving their electric bills. And, as in most cases, those that already struggle to pay their bills were impacted even worse. While TVA had provided energy efficiency services to the community, that was also gone.

And remember, I’m not a consultant. I’m not an investor. This is not coming from a financial analyst trying to convince you of something to help themselves. And this is not anecdotal information. This is real.

MLGW should really do their research and think long term before moving away from TVA. I wish Paducah had been warned, even though many people knew. The grass may be greener, but it will be because it’s over a septic tank.

Ronnie Goode is the President of Cole Lumber Company Inc. in Paducah, Kentucky.

ARIEL COBBERT/THE COMMERCIAL APPEAL A Memphis Light, Gas and Water (MLGW) vehicle outside of Union Valley Baptist Church after poll workers reported smelling gas on March 3.