Recently, we’ve
heard concerns about the service charges that are part of every customer’s
monthly MLGW bill. We understand why customers might have questions about this
policy, and we think it’s important for everyone to understand what they’re
paying for.
If a customer is
connected to a service, they benefit from having that service available to them,
even if they choose not to use it in a particular month. This availability
relies on a complex infrastructure that requires constant upkeep. The service
charge paid by each customer helps finance that infrastructure, meaning you can
turn on a faucet or flip a light switch at any time. That’s why some people
refer to the service charge as a “convenience fee” or an “availability fee.” It
ensures the utility is available to you on demand.
Without the
service charge, a customer who doesn’t use electricity, gas or water — but still
has them instantly available — would not be contributing to the costs of making
sure those services are always there when they’re needed.
A separate
component of the bill is for the actual consumption taken. It is measured in
kilowatt-hours (kWh) for electricity and hundreds of cubic feet (CCF) for gas
and water. If you are connected to a utility service but don’t use it in a
particular month, you are not charged for any consumption (the usage rate) on
that month’s bill. However, you are charged a fee to make sure that service is
available whenever you want it. This is the service charge, and it’s standard
practice at utility companies nationwide. Service charges have been in existence
at MLGW since 1940.
Your usage rate
covers the actual cost of providing the services you used in your home or
business that month. MLGW purchases electricity and gas from providers like TVA.
We pump water from the Memphis Sands Aquifer and treat it. Then we sell each to
our customers across Shelby County. MLGW has had the lowest combined typical
winter residential bill among 50 cities across the country for five years in a
row. We only raise our usage rates when necessary to cover costs of operation
(and sometimes when required to meet minimums set by federal or state
law).
Service charges
are reviewed on an annual basis, and sometimes they change as costs change.
Currently, the service charges for residential customers are $11.60 for
electricity, $10 for gas and $7.76 for water. Because it’s not based on
consumption, it’s the same each month.
Curious about
what costs that charge covers? As of Dec. 31, 2016, our infrastructure
includes
·
4,378 miles of
overhead electric distribution lines
·
2,740 miles of
underground electric cables
·
4,488 miles of
gas mains
·
3,881 miles of
water mains
Those are just
the paths for services to reach homes and businesses. In order for electricity,
gas and water to travel along those paths, our systems rely on hundreds of
thousands of other elements. From transformers to water pumps to gas valves,
each piece of the vast puzzle must be in place before customers even have the
option to turn on the TV or light a stove. And every piece has to be maintained
(and sometimes repaired or replaced) in order to ensure we can meet the demand
on any given day.
We also
constantly upgrade our system to better serve you. Intelligent components in
some areas have greatly reduced the time it takes to restore electric service to
those customers during an outage. New substations under construction will reduce
the load on sections of our system, increasing reliability and our capacity to
meet demand. We’re nearing completion of a 30-year project to replace cast iron
gas pipes with flexible and durable polyethylene, making our gas delivery system
much safer and more reliable and making us more prepared in case of an
earthquake. These improvements would not be possible without everyone who
benefits from them contributing.
We understand
that for most of our community — including MLGW employees — every dollar counts,
and each bill has to be carefully budgeted for. Even though MLGW has some of the
lowest rates in the country, we offer a number of assistance programs, including
payment arrangements and Budget Billing. We encourage anyone who has questions
or concerns about their bill to contact our Customer Care Center at 544-6549.
Visit mlgw.com for information about rates, assistance programs and
more.
