At first glance, a Memphis, Light, Gas & Water Division transmission station is an incomprehensible tangle of fearsome-looking cables and metal machinery. 

Upon closer inspection, and detailed explanation by those whose job it is to keep the lights on, it becomes clear the MLGW transmission network holds one of the keys to Shelby County’s electricity future. 

At present, MLGW’s transmission system is designed to take in electricity from the Tennessee Valley Authority — the federal power provider — at four points.

Consultant: MLGW shouldn’t ‘close the door’ on leaving TVA

Any change in electricity provider could require changes in that transmission system, MLGW leadership says. 

Doug McGowen, MLGW’s CEO, said Friday the utility would have to reconfigure its transmission system if it left TVA and that was the reason for the jump in MLGW’s projected transmission costs when it bid out its electricity supply in 2021 and 2022. 

The utility’s projected transmission costs climbed from about $700 million to $1.2 billion if it left TVA late in the bidding process. 

The reasoning for that $500 million increase in projected transmission cost, said McGowen and Nick Newman, the utility’s vice president of engineering, is due to the projected reconnoitering of MLGW’s transmission network if it were connecting to another power grid. 

McGowen’s comments about the transmission system came during a five-hour MLGW bus tour Friday. The utility gave its board of commissioners — all citizen volunteers — and one reporter a tour of the utility’s infrastructure throughout Shelby County.

No votes or deliberations were taken. MLGW employees explained the basics of the utility’s operations, including showing how linemen’s gloves are tested for holes.

McGowen and Newman said if MLGW were to leave TVA, generate some of its own power and connect to the neighboring grid of the Midcontinent Independent System Operator (known as MISO), the four transmission stations that take in energy from TVA might not be what MLGW needs. They said the needed changes to the transmission system became apparent as the utility received bids on its electricity supply. 

MLGW to use drones to inspect power infrastructure

The utility executives' comments come after it received criticism for how the cost of transmission increased throughout the electricity bidding process, known in the industry parlance as a request for proposals. 

Enervision, the city’s independent energy consultant, described the increase in transmission cost as “insufficiently explained” in a report issued last month. 

“It should be noted that while an insufficiently explained increase of $480 million of one-time cost is not insignificant, it is only a fraction of the total power supply cost which totals around $1 billion or more per year,” Enervision wrote. 

Difference between transmission and distribution

Electricity comes to Memphis and Shelby County at the four aforementioned transmission ties with TVA. 

Then, the utility uses its transmission network to step down the electricity — reduce the voltage — so it can distribute it across its distribution station from substations to distribution lines to individual homes.