MLGW rate hikes endorsed by Memphis City Council committee

Ryan Poe, USA TODAY NETWORK – Tennessee

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Memphis Light, Gas and Water President and CEO Jerry Collins holds a press conference explaining that a social media rumor that former Memphis Grizzlies all-star Zach Randolph donated a $1 million to help pay their costumer bills is false. (Photo: Mark Weber/The Commercial Appeal)

A Memphis City Council committee voted Tuesday to recommend approval of increases to water, gas and electric utility rates over the next three years, despite the Greater Memphis Chamber’s concerns about the impact on the local economy.

The increases will raise the average residential customer’s Memphis Light, Gas and Water Division bill by $11.53 per month within three years, according to information given to council members.

The council will vote on the rates at the next council meeting Dec. 19.

Kelly Rayne, the Chamber’s senior vice president of public policy, requested a two-week delay of a vote on the rate increases to allow the organization to gauge the impact on the business community. Businesses, which prize economic stability, were already surprised earlier this year by hikes to city sewer and stormwater fees, and only found out two weeks ago about the possibility of utility rate increases.

“It’s a big deal,” Rayne said. “It really impacts our residents and our companies.”

The committee endorsed a 1 percent increase in the water rate, an increase of 18 cents on the average residential customer’s utility bill; a 4.5 percent increase in the gas rate in 2018 and 2019, an average increase of $1.62 and $1.69 respectively; and a 3 percent increase in the electric rate through 2020, average increases of $2.62, $2.68 and $2.74.

MLGW CEO Jerry Collins said failure to increase the rates as operations costs increase and as customer energy efficiency improves would “significantly” hurt the organization’s bond rating, meaning MLGW will have to borrow more money at a higher interest rate.

“No. 1, Wall Street is watching,” Collins said.

Still, council members struggled with the idea of raising rates on their constituents, some of whom are struggling to make ends meet.

“You’ve just shared that you’re running out of money,” she told Collins. “Well, my constituents have shared the same.”

MLGW last raised the water rate in 2016, the gas rate in 2008 and the electric rate in 2004.

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