MLGW tells council it aims to replace all lead service lines by 2037; warns SRF loan could shift costs to ratepayers

Memphis Light, Gas and Water officials told the Personnel General Governmental Affairs Committee that the utility intends to replace all remaining lead service lines in its system by 2037 and is pursuing both public- and private-side replacements to reduce exposure.

"We have the intent to replace the lead service lines in our system by 2037," MLGW President Doug McGawan said as he opened the presentation. He and Shandria Rosser, vice president for water and gas engineering and operations, told council members the utility’s plan targets roughly 1,500 replacements a year and uses PEX pipe for long-term durability.

MLGW said its current water budget supports about $10.5 million a year for the program and that the utility has replaced nearly 12,000 public-side services since 2012. McGawan noted the utility began limited private-side replacements in 2025 and is using a $5 million American Rescue Plan Act (ARPA) allocation to replace about 400 private-side lines by September 2026.

The presentation stressed two practical points affecting cost: a recent city paving standard requires full lane-width street repairs after a cut, and an increased street-cut fee now reimburses city engineering costs. Those changes raise the per-replacement public-side cost from roughly $2,500 historically to about $5,000–$6,000, McGawan said.

Officials flagged a funding decision that will require council attention. Tennessee plans to distribute federal replacement funding through its State Revolving Fund (SRF) with an approach that forgives roughly 50% of borrowed amounts, McGawan said. "They will forgive 50% of the amount that we borrow," he said, adding that the remaining repayment would likely come from ratepayer dollars unless the state conveys the federal aid as a straight pass-through grant.

"If we choose to do that, there will be some ratepayer money that is allocated for this," McGawan told the committee, and he said he will ask state officials whether the funds can be treated as grants rather than loans before MLGW decides to take SRF dollars that would require utility repayment.

MLGW also described operational challenges for private-side work, including verifying unknown service materials on customer property and obtaining homeowner rights of entry. The utility’s communications lead urged council members to help build trust through local outreach; in a district example MLGW reported contacting 720 eligible homes, obtaining 150 signed rights of entry, and recording 68 explicit refusals.

Council members asked about short-term protections and testing. Officials said MLGW treats corrosion control as one protective measure — "we use a food-grade phosphate within our water system that actually coats the pipes" — but emphasized that removal of lead piping is the most reliable mitigation. MLGW said it will deliver lead test kits to residents and provide pitcher filters to households where service lines are replaced.

Next steps: MLGW will continue private- and public-side replacements, seek clarity from the state on SRF loan terms before deciding to use ratepayer dollars for private-side repayment, and include the program’s costs in upcoming budget presentations to council.