Memphis’ stalled power supply process could help TVA
The year is poised to end without Memphis being any closer to making a decision about leaving the Tennessee Valley Authority.
Since the process of bidding out Shelby County’s future electric supply short-circuited this fall, Memphis, Light, Gas and Water has been stuck.
It can’t bid out its electricity supply without the Memphis City Council’s permission.
On Oct. 3, after heavy lobbying from another company and politicians, the council voted against using the firm MLGW leadership chose for the bidding. Some members tried directing the contract to the company that lobbied them.
Attorneys for the city-owned utility balked at proceeding further, fearing a lawsuit. Discussions about what to do continue, but there is not yet a clear path forward.
But, for one interested party in the Memphis electricity tussle, TVA, the delay could provide opportunity.
“I think over time, TVA is going to demonstrate more and more value to Memphis. I think that’s true. That’s certainly our objective,” TVA CEO Jeff Lyash said in an interview on Dec. 16. “If Memphis tests the market..., they’re going to see the TVA as a better value, so I’m confident either way.”
While Lyash said a year ago that TVA wouldn’t negotiate with MLGW, its largest electricity customer, the federally owned power provider has sought to offer inducements — investment, corporate jobs and lower rates — that make Memphis and Shelby County feel respected, something that has not always been the case.
Behind the scenes, TVA continues to work at influencing local leaders and is preparing to unveil some of its promised investments in Memphis.
It could soon boost its employee
headcount in the city. It cut its rates this fall, too, reducing what appears, in fine print, on users’ bills as a fuel-cost adjustment. That tweak saves MLGW customers a few dollars a month.
In mid-november, Lyash sent the City Council a letter seeking to correct what he described as “misinformation” — whether Memphis could use TVA transmission lines to bring in outside power.
That argument has been pushed by representatives of Franklin Haney, a Chattanooga businessman who has pitched Memphis on buying power from an unfinished nuclear plant in Alabama and then wheeling it through TVA.
When voting on the awarding the electricity bidding contract to GDS Associates, multiple members of the city council disputed the need to study where transmission lines would have to built to bring Memphis power. They said they believed TVA could be forced to wheel Memphis power using its transmission lines and, thus, bidding out the cost of transmission lines was an unnecessary expense.
Citing federal energy regulations, Lyash wrote, “While an (local power company) is free to terminate its power contract and to choose a different power supplier, TVA will not wheel to a departing customer and burden other LPCS, and their ratepayers, with the increased costs that would result from the departure.”
In the interview, Lyash noted the outside money involved in the Memphis power decision — TVA and Haney have fought each other in court for years.
The chief executive said, “If MLGW decides to leave TVA, there’s going to be a lot, a lot of money having to be invested, a lot of risk taken and somebody’s going to make a lot of money. It’s not gonna be the citizens of Memphis. I can tell you that.”
Samuel Hardiman covers Memphis city government, politics and the pandemic response for The Commercial Appeal. He can be reached by email at samuel.hardiman@commercialappeal.com or followed on Twitter at @samhardiman.