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MLGW presents 2026 budget: no new rate increases, continued capital for reliability and grid modernization
Summary
Memphis Light, Gas & Water briefed council committees on the proposed FY26 operating and capital budgets. The utility said overall spending will be slightly lower than FY25 largely because some large capital programs are complete or will be delivered under PPA rather than capital. MLGW said it will not propose new rate increases in 2026 and will
Memphis Light, Gas & Water presented a high-level overview of its FY26 operating and capital plan and set a public budget hearing for Nov. 12. The utility said the FY26 budget is slightly smaller than its FY25 plan largely because a number of multi-year capital projects were completed in the current year and because some planned battery/solar capacity may be procured under a purchase-power agreement rather than as a utility capital asset.
President McGowan and CFO Rod Clayton highlighted continuing investments under MLGW's renewal-and-replacement (R2I) program: medium- and high-voltage circuit-breaker replacement, transformer and substation work, underground cable replacement and distribution reclosers. McGowan said these investments are intended to lower the age of key assets and improve reliability. He told the committee that replacing circuit breakers had reduced average breaker age from roughly 50 years toward the mid-30s.
On rates, MLGW told the committee it planned no new rate increases in 2026. A scheduled third installment from the multiyear rate plan previously approved was noted as part of the financial forecast; the utility said this iteration of the budget includes no new rate action.
On customer assistance and planning needs tied to federal events, MLGW said it maintains several support programs and that additional council funding would expand the number of customers served: the utility said a $1,000,000 allocation in a prior year assisted about 1,600 families.
MLGW also listed non-recurring purchases requested on the consent agenda, including large circuit-breaker supply contracts, master paving increases, SCADA and GIS software renewals and funding to close out a long-running water-main project (Weaver to Gill). The utility said most items were routine renewal, replacement, or necessary purchases to complete projects and maintain system reliability.
