MLGW CEO Doug McGowen shared details of the proposed FY24 Budget at today’s Board of Commissioners meeting with a clear focus on reducing the frequency and duration of electric outages, meeting the growing community demand for the utilities we rely upon, and maintaining the quality and reliability of water and gas utilities.

The FY24 budget will advance several bold initiatives and proposes a significant increase in spending to drive electric system reliability and resiliency by:

· Funding aggressive Tree Trimming.

· Replacing outdated infrastructure.

· Adding more in-house and contracted staff to do the work.

· Modernizing the grid to a best-in-class standard.

· For the first time, adding electric storage to the system, and starting feasibility work on utility scale solar power.

· And for the first time since the 1950’s, funding electric generation assets for reliability and to catalyze continued economic growth.

FY24 starts what will result in a multi-year program of $1.2B of improvements to the Electric Distribution system aimed at reducing frequency and duration of electric outages and making our grid ready for the demands of tomorrow.

This budget also contains significant investments in Gas and Water systems to maintain their quality and reliability.

Positioning for economic growth, pivoting for the new normal.

Memphis and Shelby County are seeing economic growth and increased interest from companies that want to locate their operations here. At the same time, continued growth across the southeast and the Tennessee Valley means that TVA will need more generation than presently under construction, and that will take time to build. There will be a period of a few years in which large new loads will have to agree to interrupt their operations, if the system conditions require it, to protect the power supply to existing customer loads.

For MLGW, ensuring we have sufficient, reliable power for all our customers, and enabling new, large-use customers to be served without interruption in the near term is critical to continuing economic development in our area. In 2024, MLGW will begin the engineering necessary for the installation of up to 100MW of battery storage in the distribution system, which will provide an additional hedge of energy that allows new customers to come onto the system. Additionally, MLGW is allocating $120M of funding in 2024 to secure aeroderivative turbine electric generators, generating more than 30MW per unit as a back up to the existing power system. Both of these measures will allow new, large customers to come onto MLGW’s system without being subject to interruptions.

Increased spending on reliability and inflationary pressures impact FY24 electric rates.

Continued inflationary pressure on the cost of goods and services, the addition of more personnel, and critical investments in grid modernization, electric generation and storage necessitates an acceleration of previously forecast electric rate increases. What was previously a 10.5% increase over three years starting in 2025 is now proposed as a 12% increase over three years starting in 2024. The customer impact will be about $5 per month for electric service, with no increase in rates for gas and water. Our rates will remain among the most affordable in the nation.

Memphis Light, Gas and Water is the largest three-service public power utility in the nation, serving the residents of Memphis and Shelby County, Tennessee since 1939. MLGW consistently provides customers with rates that are amongst the lowest in the nation and stewards a water supply from artesian wells that is minimally treated. Actively engaged in promoting the prosperity of Memphis and Shelby County, MLGW supports the seven local chambers in its service area and makes doing business with local, minority- and women-owned business a priority. Deeply rooted in the community, its employees generously donate time and money in support of bettering the Greater Memphis area.