Tuesday, July 22, 2014

Response to MLGW Giving City of Memphis $300 million for Pension Crisis

From Jerry Collins Jr., MLGW President and CEO:

In response to the recent suggestion that MLGW should loan the City of Memphis $300 million, it should be noted that such a loan would exhaust MLGW’s working capital balances. A prudent utility should maintain at least 45 days worth of working capital in order to be able to pay its monthly electric power and natural gas bills from its suppliers. In 2013, MLGW paid approximately $1.2 billion for electric power and natural gas out of a total budget of $1.85 billion. The bottom line is that the current MLGW working capital balances are appropriate to meet cash flow needs and to maintain our excellent bond ratings. MLGW continues to provide the lowest combined utility rates of any major city in the country.

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