Ah, the politician’s best friend – a committee.
Appointing one was Memphis Mayor Jim Strickland’s definitive response to the outrage from a week’s worth of electricity outages that undermined his “brilliant at the basics” mantra.
Meanwhile, he and others in city government are fine that the most important decision about our utilities in 100 years in being made in secret at MLGW, where almost 30 responses to its Request for Proposals for electricity providers are being evaluated.
The closed meetings appear to be in violation of the Tennessee Public Records Act and Open Meetings Act and Memphis City Council’s own resolution on open records and meetings. They also give strength to suspicions that MLGW has its thumb on the scale and the city administration pretends that it doesn’t see what’s happening before its very eyes.
Committees As a Political Dodge
Committees are a favorite response from politicians looking to defuse a controversy, to sidestep a decision, and in hopes that the committee can drag out the issue until all the emotion is drained from it. There’s also the potential that the news never follow up.
That’s precisely what happened to another high-profile announcement about three years ago. The Memphis Power Supply Advisory Team’s 20 members were appointed April 2, 2019, as the heat was building to sever MLGW’s long-time relationship with Tennessee Valley Authority.
The Power Supply Advisory Team was charged with taking a broader look beyond the technical considerations of making a change and to focus on what was best for the community. The news media said its purpose it to consider “how Memphis can provide the most reliable and affordable option for utility customers.”
Meanwhile, running simultaneously with the Power Supply Advisory Team, the MLGW board was to move toward a recommendation on whether to keep TVA despite the widely-held suspicion that MLGW President J.T. Young had already made up his mind to do so.
When Mr. Young was appointed as facilitator for the Team’s six or seven monthly meetings, it was construed by many that the committee was largely window dressing since it was largely hearing presentations from MLGW.
Despite the fanfare by Mayor Strickland and Mr. Young when the Power Supply Advisory Team was announced, the group never even issued a report or final recommendations.
Death By Pin Pricks
Like the new committee, the Power Supply Advisory Team was named after Mr. Young conferred with Mayor Strickland who was looking to deal with political blowback and a call for him to take a clear stand.
Appointment of the committees are especially ironic considering that as a City Councilman, Mr. Strickland ridiculed former Mayor A C Wharton for never having met a committee he didn’t like and accused him with weak leadership.
And yet, if there has been a consistent theme in the entire debate about whether MLGW should leave TVA and contract with another energy provider charging lower rates, it has been weak leadership from City Hall. It’s a strange political decision because as a result of not asserting himself more, he’s in the position of death by a thousand pen pricks.
It’s the old political axiom: the lack of a strong decision makes everyone mad at you instead of just one side of a dispute.
You Never Sell Your Seed Corn
The latest Strickland-Young committee will “examine how to avoid widescale electrical outages in the future, according to The Commercial Appeal’s Sam Hardiman. The mayor said “the commission will also discuss selling Memphis Light, Gas and Water.” The sale of MLGW was an idea that the mayor blurted out when pressed time and time again about the need for better infrastructure, saying the sale could pay for putting all electrical lines underground.
The idea of selling MLGW is of course a waste of time because it was proven during the Herenton Administration that the idea is the third rail of local politics. Back then Mayor Herenton suggested a sale, the outcry was intense, broad-based, and unified.
More to the point, using an analogy from my Arkansas farm ancestors, you never sell your seed corn to pay for a new tractor. The seed corn, or in our case, MLGW, is where the long-term value lies.
That’s why it’s smarter to wait and see what the ultimate decision is about TVA. All the studies, including MLGW’s own, show that a different provider of electricity than TVA would produce hundreds of millions of dollars a year, or, enough money to pay for any infrastructure upgrades without selling the city’s most valuable – and most valued – asset.
Trees #1 Cause of Outages
As the committee hears MLGW’s mantra about its failing infrastructure, it might want to read the Baker Tilly Virchow Krause LLP and HDR organizational report dated October 21, 2019. On page 14, the report made this definitive statement, which it said was based on MLGW’s own data: “Vegetation management is the number one cause of outages for MLGW.”
In a January 7, 2020, powerpoint presentation, MLGW said it was 1,400 miles behind in tree trimming, almost a full year behind, predicting that it would fall behind even more with increased outages from tree damage.
It wasn’t surprising, because in its FY2019 budget, MLGW cut the tree trimming budget by $14.4 million. At the time, the tree trimming cycle took four years. The report also said that money to increase the tree trimming budget could come from rightsizing the payroll – and reducing redundancies – of MLGW.
Evaluating MLGW with comparable utilities, the report said the Memphis utility had 13.43% more employees than expected. The report “recommends decreasing head count throughout the organization through means of attrition and/or specific reductions in staff.” The workforce reduction would save $35.8 million.
In addition, it identified deferred infrastructure investment that contributes to interruptions in service. In addition, operational improvements can result in cost savings. In its 2020 presentation, MLGW said that it needs $640+ million for improvements to its system and increased maintenance spending. The powerpoint does not indicate that there was any mention about reducing payroll.
Tomorrow: Is MLGW Objective in TVA Decision?