When the Memphis Light, Gas and Water Division board meets Wednesday, Aug. 19, it will get a recommendation from utility President and CEO J.T. Young that is an important step in deciding whether the city-owned utility should stay with the Tennessee Valley Authority.

But it probably won’t be the ultimate stay-or-leave recommendation.

MLGW board to get recommendation Wednesday on TVA ties

Talking to Memphis City Council members Tuesday, Young indicated he will probably recommend that the utility put out a request for proposal, or RFP, to get more specific figures about what an exit from TVA would cost and what it would take to replace TVA and what staying with TVA would look like.

It includes such key decisions as whether MLGW should generate its own electricity or possibly contract with a company to build a power generation plant or buy all of its power from utilities like Entergy.

“It really needs to be explicit about what we want,” Young said of the RFP. “What we get today from TVA is more than a power supply. We have to be very deliberate about what we are looking at.”

That is a next step beyond the Integrated Resource Plan by the Siemens consulting firm completed earlier this month. The IRP offered a detailed view of the considerations to be weighed in leaving and putting together a new electric power supply arrangement or remaining with TVA.

The RFP would put specific dollar figures on all of those considerations. And who fields those numbers and considerations and sorts them for MLGW is a key decision.

“We could have gotten anyone to tell us how much power would cost,” Young said. “We could have done that before the IRP. … We wanted to make sure we did not leave out what is important to the community.”

The most mentioned rival to TVA as the electric power supplier to MLGW is MISO — Midcontinent Independent System Operator — a power consortium that oversees a network of independent utilities and power generators.

Council member Jeff Warren has advocated calling on ACES — an energy management company with ties to MISO — to do the RFP.

But MISO central region Executive Director Melissa Seymour says there are other firms that could undertake the same kind of specific review.

MLGW-TVA final report says utility ‘too large’ to depend on MISO alone

Seymour said the next step of an RFP would tell the utility more about what is at stake.

“It will tell you what amounts of generation are out there and available for MLGW to purchase today and at what price and what location,” she said. “You can make sure the cost that’s represented in your IRP is valid.

TVA has offered a 20-year contract to MLGW with a 3% discount or signing bonus.

Several environmental groups filed suit Monday in Memphis Federal Court challenging the 20-year term that other utilities have entered into already with the federal agency.

The lawsuit filed by the Southern Environmental Law Center claims the two-decade period hurts the ability of local utilities to increase their use of renewable energy sources.

TVA countered in a statement Tuesday that the 20-year contracts are voluntary and that 141 of the 153 utilities who get their electric power from TVA have already signed the contracts.

MLGW is TVA’s largest customer.