Thursday, May 16, 2019

TVA Makes Case For MLGW Not to Switch Suppliers

Posted By on Thu, May 16, 2019 at 3:32 PM

click to enlarge Jeff Lyash, president and CEO of TVA speaks to PSAT - MAYA SMITH
  • Maya Smith
  • Jeff Lyash, president and CEO of TVA speaks to PSAT

The head of the Tennessee Valley Authority (TVA) told the team charged with weighing power supply options for Memphis that he’s “committed to helping them through the process.”


At the second meeting of Memphis Light, Gas & Water's (MLGW) Power Supply Advisory Team (PSAT), Jeff Lyash, president and CEO of TVA, said he would like to see Memphis stay with TVA, but that he’s committed to helping Memphis make the “right decision.”


“It’s a critical decision for MLGW and the community of Memphis,” Lyash said. “So we want to help you through this process in order for you to get all the information you need … But, at the end of this, we would like to be your power supplier.”


Lyash said that in the past TVA has not “lived up to our or your expectation” in serving Memphis, but that “one of my objectives this year is to change that.”

Making the case for TVA, John Thomas, chief financial officer of TVA, said Memphis has the lowest, most competitive utility rates in the country,


Thomas also said that the utility doesn’t anticipate those rates increasing over the next 10 years. This summer, the utility will draft its long-range plan for the next 10 years, which will include rate projections.


Although Memphis has the lowest rate in the country, at 6.81 cents per kilowatts hours, Memphis City Council member Martavious Jones, who is serving on the PSAT, said that about 20 percent of that rate is allocated to TVA’s debt budget.


Jones said without accounting for the utility’s debt, the rate would be 4.81 cents per kilowatt hour. If switching to another utility, with no debt, Jones said the rate might be cheaper, but the group should also consider the costs of transmitting the power to Memphis.


Lyash agreed, saying that MLGW should be “very careful and diligent” throughout the process and understand the “risks and assumptions” of any decision.


Lyash said that if MLGW pays 3 cents per kilowatt hour, “that’s not enough.” He said the utility also has to pay for reliability, operations, transmission, and maintenance. TVA’s rate includes those, he said.


“What you’ll see over time is that people like to quote you an energy price, but make sure you’re getting the whole picture.”


Lyash said that TVA’s transmission system is “arguably the most reliable in the country.”


“You need to consider what stands behind the product you’re buying,” he said. “Our power portfolio is strong and moving in the right direction.”

MLGW president and CEO J.T. Young, who is heading the PSAT group, said the purpose of Thursday’s meeting was not to deliver a “TVA sales pitch,” but to look at the current state of operations in order to understand “how we get what we get.”


“When we anticipate anything different from that, we need to start with a good base line,” Young said.


Ultimately, any recommendations the PSAT team comes up with will have to be approved by both the MLGW board of commissioners and the Memphis City Council.


Still, Young said their input is “critical” to the final decision.


The next PSAT meeting will be on June 6th at the Benjamin L. Hooks Central Library at 10 a.m. Young said the group will review the recent studies done on alternative power suppliers. All of the meetings are open to the public.

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