The MLGW Board of Commissioners today received a proposed $1.7 billion operating budget for 2008. Highlights of the budget include a temporary one-year weather credit in the electric division and modest increases in natural gas and water rates. When combined, the typical residential customer will see the cost of services go up an average of 1.9 percent or $3.26 per month (the actual customer impacts may vary depending on actual consumption). The gas rate change will also feature a proposed structure that will minimize the Purchased Gas Adjustment component of the bill and align the gas rates to encourage conservation.

This is the first rate increase proposed by MLGW in four years. The increases in gas and water rates are needed in order for MLGW to meet overall operating expenses. The Board will vote on the budget at its next meeting, scheduled for Thursday, October 18. It will then go to the City Council MLGW Committee for review.

“Approximately 80 percent of a customer’s electric and gas bill is passed on directly to TVA and natural gas suppliers. What we are working on is the 20 percent that MLGW has control over. While this budget does call for a modest increase in natural gas and water rates and a small decrease in electric rates, it will ensure that we are able to continue to provide quality, reliable services to our customers at the lowest possible cost,” said Jerry Collins, Interim Chief Utility Officer at MLGW.

Highlights of the budget include:

$106.3 million in capital investment into the MLGW infrastructure.

Substation upgrades and installations across the service territory.

Installation of an emergency generator at Shaw Pumping Station.

Seismic improvements to Sheahan Pumping Station.

Street lighting installations.

Reduction of the growth rate of core operating and maintenance expenses.

Elimination of unnecessary overtime.

Reduction of part-time and temporary employee workforce and the addition of full-time positions.

Development of a new energy conservation and weatherization program.

“We work to ensure our customers pay the lowest possible rates, consistent with safe and reliable service. MLGW’s portion of the average residential bill has increased only 2.9 percent since 2004, which is less than the rate of inflation. Even with the proposed modest rate increases, our customers will still pay some of the lowest utility rates in the nation,” Collins said.

MLGW is the largest three-service public power utility in the nation, serving more than 420,000 customers in Memphis and Shelby County. A 2007 national survey of large metropolitan areas showed that MLGW is ranked sixth for the lowest combined residential utility bill.