Memphis’ light gas and water have taken several baby steps this year to create its own solar system, but major hurdles get in the way.
MLGW’s exclusive power agreement with the Tennessee Valley Bureau prohibits city-owned utilities from obtaining power from anyone other than TVA.
Of the 153 local utility companies that TVA serves, 148 have signed a 20-year long-term contract, allowing TVA to generate up to 5% of its electricity on its own. Memphis is one of five without long-term contracts, preventing the utility from generating its own power.
“The community needs more energy. The demand is increasing. Where can we get it? Dennis Lynch, a resident of Midtown Memphis and a member of the MLGW Citizen Advisory Committee, said: .
“We could imagine a lot of empty blocks in Memphis being covered with solar panels and then people would become members and electricity bills would be reduced, but still not permitted under the current TVA contract.”
MLGW operates under a five-year contract with TVA, dating back to December 1984. The Section 2B agreement states that “TVA has the right to directly provide services to consumers who are said to have no resale fee schedule applied.” agreements include TVA, including large-scale users of the federal government and electricity. He says he has the right to provide power to other types of customers. The 1984 language prevents MLGW from gaining power outside of TVA.
Long-term contract status
In 2022, MLGW discussed a 20-year long-term agreement with TVA to power Memphis. However, the terms of the 1984 contract remained as that long-term agreement was never signed. In May 2023, MLGW CEO Doug McGowen announced that the utility would stick to TVA as Power Supplier, under the terms of the old contract for now.
Was that a mistake?
Not so, said Stephen Smith, executive director of the Southern Alliance for Clean Energy. That’s because long-term commitment to TVA means that Memphis is likely not likely to be able to leave under TVA due to the troublesome exit clauses of such contracts.
Under the terms of the current agreement, MLGW must provide a five-year notice if TVA wants to leave. Long-term contracts required 20 years of notice. This means it will take decades before Memphis can leave under the TVA.
“MLGW is succumbing to clean energy, especially the fact that it is not independent of TVA,” Smith said. “But I don’t think signing a long-term contract is worth it. Memphis will lose by agreeing to stay at TVA for a long time.”
One reason is that the 5% limit TVA for long-term customers is only a small percentage compared to the potential for solar power generation in West Tennessee, Smith said.
“MLGW did absolutely the right thing by not signing that long-term contract. Instead, it would be possible to re-negotiate that contract with MLGW and use leverage, which should encourage the use of renewable energy. I want to start,” Smith said.
Baby steps to solar power generation
On October 2nd, MLGW Board CEO Doug McGowen outlined the 2025 capital improvement project. He said the utility is moving towards solar power by installing its first battery storage system.
McGowen acknowledges that MLGW is being prevented from creating its own solar power generation due to its current TVA-MLGW contract.
“We’re still committed to it. At the meeting on October 2nd, McGowen said, “We have some architecture and engineering money allocated to solar. In collaboration with our TVA partners, we’ve got the current state of the We are deciding how we do that with contract constraints. That remains a priority for us.”
Solar power is part of what McGowen calls “active capacity expansion” to provide electricity to Memphis. At the latest MLGW board meeting on February 5th, McGowen noted that requests for battery storage proposals will soon arise. However, he did not provide an accurate timetable. McGowen says Memphis needs to expand its ability to provide electricity for economic growth
The best example is the establishment of a Xai facility in Southern Memphis, with great demand for strength. Bloomberg News Although the new AI data centers reported that they could be a driving force behind economic growth for the community, there is a huge demand for power. A community ready to provide an increasing amount of electricity will become the beneficiaries. And part of providing more and more electricity is that local communities need to generate their own electricity, not only to buy it from someone else.
Battery storage is crucial for solar planning, as the sun doesn’t shine at night. Therefore, it must be stored for electricity during the day and for use at other times. However, a battery storage system is just the first step to using the sun to generate electricity.
Memphis is late
TVA Senior Relations Specialist Scott Brooks confirmed in an email that Memphis is a minority when it comes to developing its own generation, saying, “Many of our partners do solar and community solar.” It writes:
Other TVA communities that generate their own solar power are Knoxville Utility Board, Brig Tridge (serving the Tricity area of Tennessee) and Nashville Electric Services.
A 2023 study conducted by the Southern Alliance for clean energy “Southeast Sun” Memphis is far behind Knoxville and has confirmed it is on par with Nashville when it comes to using electricity generated by the sun.
The same study showed that Memphis is even more behind Knoxville by 2027 if things remain the same on the TVA contract. Tennessee is completely TVA-provided and lags behind the average utilities in Florida, Georgia, South Carolina and North Carolina.
The goal of creating Memphis’ own solar system is nothing new. This was part of the Memphis Region Climate Action Plan written in 2020. The plan on page 222 states: From partnering with TVA to increasing renewable energy in its portfolio, to encouraging and building local sources of renewable energy (particularly solar). ”
The plan said the city of Memphis and Shelby County will work with TVA to explore changes to the MLGW contract. The report mentions solar power 35 times as an important target for the community.
More than five years after that report, there has been no progress in establishing a local solar system in Memphis.
There are several solar power generation
Despite the restrictions, there is no solar power in Memphis. TVA contracts do not prevent businesses, individuals, or even government agencies from installing solar panels to generate electricity. Shelby County’s largest solar project takes place on Agristers, where thousands of vehicles are bubbled with five acres of solar panels on Walnut Grove Road.
The project, launched in 2012, generates enough electricity to power 110 homes a year. And it relates to TVA’s system, indicating the potential for solar power generation in Memphis. The Shelby County Government is also generating electricity by establishing a modest collection of solar panels from Farm Road behind the County Law Enforcement Department.
How can Memphis begin to maximize the benefits of solar power?
A frequent speaker on the MLGW Board of Directors and a member of the West Tennessee Sierra Club, Lynch says that citizens’ actions are necessary to change the situation.
“Citizens need to understand better what the story is,” Lynch said. “They need to knock on the MLGW door and ask about MLGW. What are they doing to allow TVA to install solar?
