Memphis Mayor Jim Strickland has proposed a study commission that would study how to avoid large-scale blackouts in the future. He said the commission would study the sale of Memphis, Light, Gas and Water.
Strickland told the Memphis City Council that he and MLGW CEO JT Young agreed to form the study committee over the weekend.
The mayor noted that the city has experienced widespread outages during storms and other events for more than 25 years, but the problems persist. MLGW completed restoring power on Monday, 12 days after winter storm Landon caused extensive damage to trees and the power grid.
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“Honestly, we haven’t done much,” Strickland said. He announced the formation of a committee after his comments last week when he revived the long-held idea that the city would sell MLGW to the private sector and use the proceeds from such a sale to fund power lines underground.
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In an interview with The Commercial Appeal after speaking to council, the mayor said he was seriously considering the sale of MLGW, but made it clear he was not proposing such a sale before voters.
“It’s a very big problem that needs a very big solution,” Strickland said of the city’s electrical infrastructure.
Striickland also said selling MLGW isn’t the only option on the table that would be considered. He also included raising electricity rates to pay for infrastructure and cutting down trees as options.
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MLGW is in the middle of a five-year infrastructure plan and received rate hikes in early 2020 to pay for it. Strickland said he was unsure whether this infrastructure plan would have avoided outages had it been implemented sooner.
“I don’t know enough to know,” Strickland said. “What I don’t know is how much that five-year infrastructure plan would have helped in the storm that happened or was it totally unrelated. When you drop an 80-year-old oak tree on a power line , I don’t know what infrastructure can help unless it’s underground.”
MLGW CEO, “I apologize”
MLGW CEO JT Young faced Memphis City Council on Tuesday for the first time since winter storm Landon. He gave a detailed report on how the utility restored power after the storm.
“I apologize. I know we can do better and we will,” Young said.
The report that MLGW submitted to the city council detailed the number of people in each of the municipalities in Shelby County without power. At one point, 56% of Memphis and Arlington MLGW customers were without power.
The outages affected 90% of Bartlett and 84% of Lakeland. Germantown and Collierville experience outages for 39% and 19% of customers respectively. Millington had only 9% of customers without power.
Within the Memphis city limits, MLGW triggered outages in all seven Memphis City Council districts. District 5, which covers much of Midtown, Binghampton and part of East Memphis, had 73% of its customers. The least affected City Council district was District 3, which had 35% of its MLGW customers.
Young also shared lessons learned from public service with the city council. These included disabling the utility’s text alert system due to malfunction throughout the storm and its aftermath and changing the utility’s damage assessment strategy.
“We need to figure out how to better manage customer expectations,” Young said. “We know that the restoration has not met everyone’s expectations.”
Young also noted that 40% of the utility’s distribution lines are underground and showed data comparing MLGW to other major Tennessee utilities.
The utility’s presentation said it would cost $1.3 million per mile to run other lines underground and cited a Florida study that claimed it would be economical.
MLGW’s Don Roberts told the City Council that much of the subway lines are outside the Interstate-240 loop and outside the Memphis city limits. Downtown neighborhoods, heavily covered in trees, saw some of the worst blackouts.
MLGW considering loans, disconnects suspended
Young said the utility will not resume disconnections for nonpayment until March 1. They were suspended after the storm.
He also said the utility was considering low-interest loans that would help customers pay for repairs to electric meters that have been removed from their homes. The owner is responsible for repairing the infrastructure on the property, raising the specter of significant costs for those trying to restore their power.
The mayor recognizes the potential downsides of the sale
In an interview with The CA, Strickland acknowledged there were downsides to an MLGW sale.
“There are pros and cons that we always talk about,” Strickland said. “If you sell it to a for-profit entity, it’s for-profit. Right now MLGW is doing everything they can. It’s a not-for-profit organization… They don’t have to make a profit and that would be a negative point of a private entity that owns it.
The positive side is that they would spend $1 billion or $2 billion to buy it and all that money could be used to improve infrastructure,” Strickland said. He said the city had “never” received a proposal. from the private sector on a potential sale of MLGW.
Strickland said he would like the infrastructure study to be completed in six months.
Power Process Based Committee
Strickland invoked a long-forgotten acronym at Memphis City Hall — the Power Supply Advisory Team also known as PSAT. This group was a citizens’ committee that studied the city’s power supply assessment process throughout 2019 and 2020 ahead of the Memphis power bidding.
This group was led by the city’s chief operating officer, Doug McGowen and Young. Infrastructure analysis will also be led by McGowen and Young, the mayor said.
Strickland also answered questions about the ongoing electricity bid, which was criticized last week by supporters of Memphis’ departure from the Tennessee Valley Authority, who claimed the process was flawed.
The mayor said he was satisfied with the course of the procedure.
Samuel Hardiman covers Memphis city government and politics for The Commercial Appeal. He can be reached by email at [email protected] or followed on Twitter at @samhardiman.