MLGW Rate Increases

MLGW Rate Increases

 

MLGW has proposed rate increases in gas, electric and water rates over the next few years. MLGW management says that part of the need for increases are related to decreasing sales in product. Well I decided to review the latest annual report available (the year ending December 31st, 2016).

 

The City Charter designates the disposition of revenue from MLGW three divisions, light, gas and water. MLGW is not a profit-making organization but it is required to breakeven and pay it debts and keep a reserve to cover its debts and emergencies with a proper margin. It also pays to the City of Memphis a payment like a for profit business would pay.

 

I have looked at the statements of the three divisions for the year ended 12/31/16 and the electric division lost $12 million dollars after paying $40 million to the City of Memphis. The Gas Division lost $14 million after paying $17.5 million to the City of Memphis. The water division made $9.8 million after paying $4.4 million to the City of Memphis. It is not clear if this includes the 2 million payment for the FedEx arena.

 

It seems clear to me that the MLGW needs a price increase to keep its financial situation secure. It is a well-run organization with well trained employees and with advanced technical knowledge.

 

Now I want to point out that MLGW employees have a much richer health care benefits then the City of Memphis and Shelby County employees. I am gathering current information of these benefits and will be publishing information as soon as I obtain the data.

 

People are becoming energy savers and the combination of advanced energy saving appliances like light bulbs and AC/heating units and smart meters are saving energy and this is a good thing for the ecology. Again this is a well run organization with competitive rates and I hope that whomever replaces Jerry Collins will be as able as he has been.

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