In a win for Memphians, local utility board votes down restrictive, never-ending power contract

This month, local utility leaders in Memphis unanimously voted to reject a proposed never-ending power supply contract with the Tennessee Valley Authority, preserving Memphians’ abilities to fight for cleaner and cheaper power options.  

The vote came after a years-long process where Memphis Light Gas and Water evaluated its power needs and weighed signing the perpetual contract. While TVA claims its “long-term agreements” only last 20 years, they are actually never-ending contracts that lock customers into perpetual deals. The contracts require 20 years’ notice to terminate and automatically extend each year, meaning any distributor wanting to leave TVA wouldn’t be able to do so, as a practical matter. 

Now, we can continue to hold TVA accountable, advocate for clean energy options, and push the federal utility to responsibly use the Memphis Sand Aquifer, which is Memphis’ sole drinking water source, for energy generation.

Sarah Houston, Protect Our Aquifer Executive Director

Local advocacy groups like Memphis Community Against Pollution and Protect Our Aquifer quickly mobilized to push back against TVA’s never-ending contract, which would have severely limited Memphians’ ability to fight for lower power bills, investments in clean energy, and environmental justice. SELC supported our partners’ efforts by developing technical comments on MLGW’s power supply options and analysis. 

The never-ending contract’s ‘one-size-fits-all’ approach also would have stripped Memphians of the ability to get programs that can help address the city’s energy needs. TVA CEO Jeff Lyash was clear that there was no room for Memphis-specific provisions in the contract, despite Memphians having a unique set of power needs. Memphis, for example, has one of the highest energy burdens in the country, meaning a higher percentage of Memphians’ income goes toward paying power bills. The city also has a legacy of environmental injustice, which TVA has contributed to and continues today.  

“We are relieved that the MLGW board unanimously voted against the Tennessee Valley Authority’s never-ending contracts,” Protect Our Aquifer Executive Director Sarah Houston says. “The work is not over, though. Now, we can continue to hold TVA accountable, advocate for clean energy options, and push the federal utility to responsibly use the Memphis Sand Aquifer, which is Memphis’ sole drinking water source, for energy generation.”  

Contracts challenge continues  

SELC, on behalf of the community groups Protect Our Aquifer, Energy Alabama, and Appalachian Voices, is currently suing TVA over the utility’s restrictive contract program.  

The lawsuit alleges that the contracts violate TVA Act, which created the federal utility in 1933. The TVA Act prevents the utility from entering into contracts longer than 20 years, however these contracts – which automatically extend each year and require 20 years notice to terminate – effectively last forever, violating that provision.   

The lawsuit also claims that TVA’s never-ending contract program violated the National Environmental Policy Act, since the utility failed to study the environmental and climate impacts of the forever contracts before entering into agreements with more than 130 local power distributors.  

The case, which survived a motion to dismiss from TVA early this year, is pending in the United States District Court for the Western District of Tennessee.