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MLGW seeks council sign-off on $22M consent agenda, flags lead‑line funding tradeoffs
Summary
Memphis Light, Gas & Water asked the council to approve roughly $22 million in consent items including grid modernization contracts and a $2.5 million prepayment for street‑cut permits, and outlined a federal/state funding option for lead-service‑line replacement that would require repaying 50% with ratepayer dollars unless forgiven.
Doug McGowan, president and CEO of Memphis Light, Gas and Water, told the City Council’s Light, Gas & Water committee that MLGW is requesting approval of about $22 million in consent items that would bring the utility’s fiscal‑year spending to roughly $140 million.
MLGW presented roughly 15 consent items, including a $1.25 million on‑call contract with Chris Hill Construction for drilled pier foundations at substations, a $313,000 five‑year SCADA support contract, a roughly $1.98 million multi‑year engagement for North American Electric Reliability Corporation compliance consulting, and a $1.113 million outage‑management maintenance contract. McGowan also described purchases ranging from bulk asphalt and fleet vehicles to network maintenance and software updates for finance and asset tracking.
The presentation included an item to prepay the City of Memphis $2.5 million for street‑cut permit fees. McGowan explained the permit fund works on a per‑cut fee basis (about $750 per cut), and that MLGW performs thousands of street cuts annually for lead‑line replacements, gas taps and other repairs.
Why lead‑line funding is complicated McGowan and the council discussed federal and state options for funding customer‑side lead‑service‑line replacements. McGowan said a federal package would flow via state revolving loan funds, under which states would forgive roughly 50% of the loan but require the remaining 50% to be paid back — a repayment that, under current plans, would fall to MLGW ratepayers. “We would have to use ratepayer dollars to pay it back,” McGowan said, adding that he had requested the federal/state process be changed so more of the money could pass through as grants rather than loans.
Council members pressed MLGW on timing and scope. The utility said it has used ARPA funds as an initial grant source and is still evaluating the long‑term funding mix and whether to use borrowed funds to pay for customer‑side replacements — a policy decision the utility will bring back to the council.
Billing modernization and customer service Timothy Davis, MLGW’s chief customer officer, described a $5.7 million, two‑year contract to modernize billing and training. Davis said the contractor will help shift the utility from legacy systems to advanced metering and will supply temporary staff and training to reduce costly bill estimations. “Think of it as transitioning from Blockbuster to Netflix,” Davis said, describing the scale of operational change.
What happens next The committee heard questions from several councilmembers about specific contracts and about how MLGW will use state or federal funds for lead replacements. The consent agenda presentation concluded with staff saying the board will not move forward without the council’s formal approval.
The item will come back to the full council as part of the consent docket; the committee did not take a final vote on the individual contracts at this meeting.
Ending note MLGW framed the request as part of grid modernization, regulatory compliance and day‑to‑day operations. The major outstanding policy question remains how to finance customer‑side lead‑line work without shifting an excessive burden onto ratepayers; MLGW said it will continue advocacy with state and federal partners and return with a recommended path for council approval.
