Memphis Light, Gas and Water Division’s first public release of information about bids it has received for a possible new electric power supplier drew criticism Tuesday (June 14), regarding the fairness and transparency of the bidding process.
The criticism came during an “Alternatives to TVA: Economic & Environmental Benefits for Memphis” luncheon at Charlie Vergos’ Rendezvous barbeque restaurant Downtown.
“This is the first in a series of luncheons to present alternatives to TVA,” said Pearl Walker of Memphis Has the Power. “The presentation by GDS Consultants last week was biased toward TVA and lacked key information.”
Walker was referring to a June 9 joint meeting of the MLGW board and the Memphis City Council at the Benjamin L. Hooks Central Library, which revealed the first public look at cost estimates and bids as the utility ponders whether to leave TVA for a new electric power provider.
The names of the bidders were not disclosed, nor were the bids, a situation that drew Tuesday’s criticism.
MLGW President and CEO J. T. Young said the information will be made public when he and his staff make a recommendation to the MLGW board in August.
Luncheon hosts charged that GDS gave a “three-hour infomercial for TVA” in the June 9 presentation.
Consultants were also criticized for ignoring 27 bids submitted in the RFP (Request For Proposal) process.
Memphis has been with TVA for 81 years and is the federally owned power company’s largest customer.
Advocates of Memphis leaving TVA said their studies estimate the city could save from $425 million to more than $450 million annually through a new provider, which would translate into reduced utility costs for residents.
During the briefing on June 9th GDS estimated the savings, based on two scenarios, would only be between $25.7 million and $55.3 million annually.
“We felt GDS did an excellent job in carefully laying out the risks involved in leaving TVA,” said Scott Brooks of TVA Public Relations.
“It also reinforced what we have been saying over the past two years. When you talk about numbers like $450 million dollars in potential savings, you would have to look at the initial investment needed upfront. You have to consider inflation affecting supply chain risk and other factors.
“What happens if building is delayed and taking longer than first and projected? GDS emphasized the very concern we have laid out all along.”
Luncheon organizers touted the merits of Midcontinent Independent System Operator (MISO), a collective of energy partners.
David Upton, with Friends of the Earth, said MLGW was “not an honest broker.”
“J.D. Young has already said how he wants this to go,” said Upton. “He has already said MLGW is not leaving TVA any time soon.
“This GDS study has cost over $1 million over several years. “And the process is even more murky. TVA is a high energy burden on Memphis. We are its largest customer.
“All our money is going to Knoxville and Chattanooga. Breaking with TVA and going with MISO will keep our money right here.”
Former-MLGW-chief-turned-environmental-advocate, Herman Morris, with Friends of the Earth, said Memphis “can do much better than TVA.”
“The use of solar and wind to generate electricity will not contaminate the environment,” said Morris. “Memphis has poor air quality from contamination over the past five years. “Solar and wind are renewable sources of power. They are cheaper and greener.”
In a related development Tuesday, East Tennessee businessman Franklin Haney, said he was one of the power-provider bidders.
During the luncheon, he said his company, the Franklin L. Haney Company, has partnered with ACES Power Marketing, General Electric, NTE Energy, Morgan Stanley, and Leeward Renewable Energy to provide Memphis with solar and natural gas energy.
Haney, the first bidder to go public, said the partnership could save Memphis and Shelby County $356 million a year. Haney once proposed selling nuclear energy to Memphis.
(This story reflects a report by Dr. Sybil C. Mitchell.)