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MLGW News Release
MLGW meets challenge of rising national energy costs
July 10, 2008
For the last decade, customers across the nation, including MLGW customers, have felt the steady drumbeat of rising heating costs as the price for residential U.S. natural gas has nearly doubled. According to the Energy Information Administration's (EIA) short-term energy outlook report in May, the price was expected to increase this year from an annual average wholesale price on the Gulf Coast of $7.17 per thousand cubic feet (Mcf) in 2007, to an average of about $9.70 per Mcf, before leveling off at about $9.40 per Mcf in 2009. The current price for July is approximately $12/Mcf.

Until the last couple of years, the costs for other forms of energy have been relatively stable. However, in the past year, coal has doubled in price, which impacts the cost of electricity produced from coal-fired plants. Since 60 percent of TVA's power is generated at its 11-fossil fuel facilities, the rising coal cost will be passed on to local customers via a TVA fuel cost adjustment mechanism implemented in 2006 that allows TVA to automatically adjust rates according to fluctuations in fuel and purchased power costs. Tennessee Valley residents have already experienced escalating electricity costs due to several TVA rate hikes of 9.95 percent, 7 percent and 7.5 percent in 2005, 2006 and 2008 respectively.

The trend in rising energy costs is undeniable and seemingly unending. Customers nationwide are being encouraged to brace themselves for skyrocketing summer and winter energy costs. But weather and many other factors will ultimately determine the local impact. Although MLGW cannot control the price of energy, the utility works to reduce the impact of rising power costs in the following ways: discounted supplies of electricity and natural gas through long-term prepayment contracts; strategic purchases of natural gas; and price protection of these purchases using a combination of futures, options and market pricing; efforts to help shape the direction of federal and state electric restructuring to ensure continued access to reliable, low-cost electricity supplies.

MLGW also aspires to raise awareness among customers about ways to minimize household energy costs. In the midst of record-breaking spikes in virtually all forms of energy, MLGW customers must be equipped with information needed to weather a volatile energy climate for the foreseeable future. For instance, you can significantly reduce summer cooling costs by setting your home thermostats to 78 degrees. Cooling costs can increase 4 percent for each degree the thermostat is set below this. The following ideas can help you save even more:
  • Keep blinds and drapes closed on sunny days to block heat from entering your house.
  • Replace lights with energy-efficient, compact fluorescent bulbs. They last longer, use less electricity and produce less heat.
  • Do heat-producing chores like drying clothes and cooking in the cooler parts of the day.
  • Seal cracks around doors leading to the outside.
  • Turn off lights, TVs and other electronics when you leave the room.
  • Repair water leaks.
  • Water your lawn, preferably with a sprinkler connected to an automatic timer, in the early morning or late evening so the daytime heat won�t evaporate your water.

    Despite their best efforts, some customers may continue to struggle with making utility bill payments. For such individuals, MLGW offers numerous assistance programs with varying eligibility criteria to ensure that those with the greatest need receive help. For starters, call MLGW at 544-6549 to discuss payment arrangements that can relieve some of the immediate financial pressure. For further assistance, consider the following:
  • MLGW�s Plus-1 Utility Assistance Program administered by MIFA at 527-0226
  • OnTrack: helps eligible participants to manage debt and pay off their bills over a period of time through financial counseling and budgeting education and potential social service opportunities. Applications are available at and at all MLGW Community Offices.
  • EnergySmart: a year-long energy education and home improvement initiative designed to help Memphians save on their utility costs through workshops that provide in-depth energy conservation training; home weatherization improvements and more.
  • Smart Pay: Helps alleviate dramatic monthly payment fluctuations by establishing a standard installment amount for a 12-month period.

    Learn about other assistance programs, as well as additional energy tips and tools, home improvement ideas, home energy surveys and calculators, and many other helpful items online at, or by calling 544-6549 to request brochures about topics of interest.

    Due to its efforts, MLGW makes a notable impact on local energy costs. A 2008 Jacksonville Energy Authority (JEA) survey of residential electric rates from 55 public and private utilities shows that MLGW customers pay some of the lowest rates in the nation. As we face the future, rest assured that MLGW will continue to find ways to contain energy costs for the welfare of our community.