A plethora of good news is reaffirming the fiscal strength of Memphis Light, Gas and Water Division: two MLGW bond issues received excellent credit ratings; the utility has the lowest combined residential utility rates for electric, gas, water and wastewater services among 26 cities surveyed; MLGW’s pension fund is 93 percent funded; and the first quarter of 2014 exceeded budget expectations. As a result, customers can expect no MLGW rate increases in 2015.
“The outstanding financial position that MLGW finds itself in is a credit to the entire staff and they continue to be focused on providing the best possible service at the lowest possible cost,” said MLGW President and CEO Jerry R. Collins Jr.
As part of bond issuances for capital improvements, Standard & Poor’s Rating Services rated the Electric Division an excellent AA+ bond rating and the Water Division earned an AAA bond rating, its highest rating. Moody’s Rating Services rated the Electric Division as an Aa2 bond rating and the Water Division as an AA1 bond rating. The Gas Division does not have a bond rating because the gas division has no debt.
“There are very few utilities with these high credit ratings,” said Rick Masson, chair of the MLGW Board of Commissioners.
Also, very few can combine those credit ratings with “breathtakingly” low rates, Collins added. In the 2014 Utility Bill Comparison, MLGW had the lowest typical winter monthly residential utility bill (electric, gas, water and wastewater combined) among 26 cities surveyed; MLGW’s $278.25 combined bill was 10 percent lower than its closest peer. You can view the complete rate survey online at mlgw.com/RateSurvey.
All three operating divisions of MLGW ended the first quarter of 2014 in excellent financial shape, exceeding expectations. The MLGW Pension and Other Post-Employment Benefits (OPEB) funds are also strong. The Pension Fund is 93 percent funded based on the market value of pension fund assets; the OPEB fund is at a 41 percent funding level, making it one of the best funded OPEB funds in the country.
“It’s a testament to good management and proper due diligence in the operation of the utility and that benefits the ratepayer,” said Commissioner Darrell Cobbins.