Local utility companies such as Memphis Light, Gas & Water (MLGW) can tap into $1 billion in available credit support that the Tennessee Valley Authority (TVA) is offering to offset the effects of COVID-19.
TVA President/CEO Jeff Lyash made that known during a Thursday afternoon media conference. He also referenced personal protection equipment for healthcare workers
provided by TVA, which supplies electricity for business customers and local power companies in parts of seven states in the Southeast.
“Because we have long-term pandemic plans, we also have a strong supply chain…we’ve been able to free up critical supplies like masks and safety glasses, which we have passed on to emergency agencies for distribution to those who need them the most,” said Lyash.
The billion dollars in credit support reflects TVA “leveraging the strength of its balance sheet” to support local power companies, Lyash said.
“This means that local power companies experiencing financial distress as a result of current conditions will be able to ask to defer their payments to TVA. As they apply for deferred payments, TVA will consider their needs and requests in an equitable manner. Those approved for payment deferral will have an extended payback period.”
MLGW Corporate Communications Manager Tamara Nolen said, “TVA is offering to defer a portion of the wholesale power payment for the 154 LPCs (local power companies) it serves. MLGW has already temporarily ceased disconnecting services for non-payment for our customers, and at this time, we do not plan to defer any of our payments to TVA for wholesale power.”
The measure was approved in a TVA board meeting on Wednesday. Lyash said TVA appreciates and supports local utility company programs that work with customers who may be unable to pay their power bills. Board members concluded deferments would help as economic pressures increase for both local utilities and the customers they serve.
As schools, businesses and other entities reduce or cease operations, more power will be used in residential settings. With people out of work and many under stay-at-home orders, individual customers will be more apt to need financial help in paying their bills, Lyash said.
Asked by The New Tri-State Defender what the proposed deferments might look like for an MLGW customer, Lyash said, “Any programs implemented to help citizens pay their bills would benefit from a deferment. When so many customers are unable to pay their bills, this may create financial pressure on a local utility company that requires credit, liquidity and support. TVA would stand by Memphis to ensure that it remains financially solid.”
In Memphis, there has been much discussion about exploring electrical power supply options other than TVA in the pursuit of less expensive rates. TVA stands by the competitiveness of its rates.
Nolen noted that MLGW is “still going through our integrated resource plan (IRP) to study our power supply options.” Prior to the novel coronavirus pandemic, the latest projections for completion of the IRP was early in May or late in April.
