The Memphis City Council delayed for two weeks a vote on proposed rate hikes as well as an operating budget for Memphis Light Gas and Water at its meeting Tuesday.
And after the meeting, Council Chairman Kemp Conrad said he does not see what difference two weeks will make.
“It doesn’t seem that there’s an appetite for a rate increase this year,” Conrad said. “We’ll see, but I don’t predict it.”
Conrad noted that a Memphis Light, Gas and Water (MLGW) option presented Monday did not include an increase in 2019, instead spreading increases over the next several years.
Still, said Conrad, “They haven’t made the case good enough.”
MLGW President and CEO J.T. Young was talking positive after the Council’s decision to delay.
“We’re optimistic because we do believe our customers want to see better service and we can’t provide better service without making the investments we need to make,” he said. “To say ‘no’ (to rate increases) is saying to our customers they aren’t going to have better service anytime soon. …We’re hopeful that in two weeks they (council members) will have satisfied some of their concerns.”
Without the rate hikes, “we can use Band-Aids to keep the power on but we can’t make any (lasting) improvements.”
Young has presented the Council with several rate plan proposals to gradually raise utility rates over the next few years. MLGW’s initial proposal for a 2019 budget was voted down last year. The utility was asked to submit alternative rate proposals.
The proposal rejected by the council in December would have raised residential bills an average of $16.77 a month, including electricity, water and gas. That would have been an average of 9.6 percent total increase in monthly residential bills.
MLGW has come up with three options since then that would raise the average residential bill between $16.92 and $18.59 a month over several years. The options, including hikes in gas, water and electric rates, are a multi-year, 9.6 to 10.5 percent rate increase.
Young said the rate hikes would be used to update the utility’s infrastructure, which he said is in bad shape, adding that the longer the council puts off the rate hikes the more expensive it will be to update and improve the infrastructure.
Council member Berlin Boyd on Tuesday said he could not vote for the increases. He asked how much of the revenue received by MLGW is put into infrastructure. He was told 10 percent. He asked where that money went, if no substantial infrastructure expenditures have been made in 10 years
Council member Martavius Jones said a lot of citizens are concerned about poor people not being able to pay their bills. He asked Young if some funds that have been allocated for tree trimming could be used to increase emergency utility funds for the poor across the city. Young said he would have to research that proposal to see if the utility can legally do that.
As for the infrastructure, Council member Joe Brown said, “the whole damn thing is falling down. It’s gone.. …You’re in bad shape.”
Brown said MLGW should take time (two weeks) to explain to the citizens the dire need for infrastructure improvements.
Council member Sherman Greer said he couldn’t explain the need for the rate hikes to constituents struggling to pay their utility bills under the current rates.
For Council Vice Chairwoman Patrice Robinson, it’s time for the council to stop putting off the infrastructure problem.
“We have to give the people some relief,” she said. “…We can’t kick the can down the road any longer. We need to tell Mr. Young what is feasible, what we will agree to…
“As a council I expect us to go home and think about it, where do we go from here,” Robinson said. “We can’t leave it on Mr. Young, because it’s our responsibility at the end of the day.”
The council needs to consider how the rate hikes will effect everyone, not just the poorest citizens, Robinson said.
“This is not just about 25 percent,” she said, referring to the percentage of Memphians who live in poverty. “This is about the whole county. We have to give the citizens some relief on outages…”
The council delayed votes on the electric and water rate hikes proposed by MLGW until the Feb. 19 meeting. The council had already voted down a proposed gas rate hike when they moved to delay. That vote could be reconsidered at the next council meeting before the minutes of the Tuesday meeting are approved.
Councilman Ford Canale cited potential savings MLGW could get by switching its electric power provider from TVA to other providers. That was in a report released last week.
“You’re talking about serious money,” he said. “Until I see why TVA is more competitive, I can’t support making the ratepayers pay for that.”