Sierra Club - MLGW

Tennessee Chapter, Chickasaw Group
Memphis, TN
October 4, 2021
Memphis City Councilpersons:

MLGW Board Commissioners:
On behalf of the Sierra Club Chickasaw Group and the Sierra Club Tennessee
Chapter's Energy Committee, we are writing to provide comments on Memphis Light, Gas,
and Water’s September 14, 2021 Request for Proposals (RFP) for Renewable and Other
Alternative Resources. We commend MLGW’s continued leadership in using Requests for
Proposals (RFP) in evaluating power supply options for the future. As confirmed by MLGW’s
2020 Integrated Resource Plan (IRP), these efforts have the potential to unlock hundreds of
millions of dollars in annual savings and to allow MLGW to assemble a resource portfolio that
cost-effectively responds to the climate crisis and other pervasive societal challenges. The
opportunity before MLGW is unique, immense and critical.
We strongly encourage MLGW to: (1) effectively include consideration of climate risk
into its RFP evaluation process; (2) seek a greater range of clean energy resources beyond
the polluting portfolios modeled in the IRP, instead utilizing more wind and solar, plus
long-term energy storage, and increasing renewables' share of the total portfolio; (3) greatly
expand its energy efficiency program; and (4) initiate a stakeholder involvement process
ASAP to ensure results that are responsive to the needs and priorities of its customers
(1) MLGW’s Future Resource Portfolio Must Consider Climate Risk

The most recent report by the Intergovernmental Panel on Climate Change makes
clear that without significant, immediate cuts in greenhouse gas emissions, global
temperatures may rise by 1.5°C or even 2°C by the end of the century, passing a key tipping
point linked to more extreme weather, droughts, food shortages, and other adverse impacts.1
Yet, beyond the existential threat posed by climate change and the moral imperative to
address it, MLGW has a duty to consider the financial implications of a climate-constrained
future and the potential impact of a fossil fuel-heavy portfolio on its ratepayers.
Federal action on climate is imminent, and is almost certain to occur over the life of
the PPAs solicited. Earlier this year, President Biden established a goal of reaching 100%
carbon pollution-free electric generation by 2035.2 In addition, multiple bills proposing
1
Intergovernmental Panel on Climate Change, Headline Statements from the Summary for Policymakers
(Aug. 2021), available at
https://www.ipcc.ch/report/ar6/wg1/downloads/report/IPCC_AR6_WGI_Headline_Statements.pdf.
2
The White House, Fact Sheet: President Biden Sets 2030 Greenhouse Gas Pollution Reduction Target,
(Apr. 2021), available at
https://www.whitehouse.gov/briefing-room/statements-releases/2021/04/22/fact-sheet-president-biden-sets-
2030-greenhouse-gas-pollution-reduction-target-aimed-at-creating-good-paying-union-jobs-and-securing-u-
s-leadership-on-clean-energy-technologies/.
national clean energy standards and carbon fees have been introduced in the 117th
Congress. In a carbon-constrained future, a resource portfolio with significant amounts of
thermal generation will create a business risk for MLGW, and a liability for its customers.
Moreover, following such a course will expose MLGW to the volatility and increasing costs of
the nation’s natural gas supply, as well as reliability issues associated with natural gas
delivery and generation assets.
Despite these clear trends, natural gas still figures prominently into MLGW’s RFP
solicitations, while sustainability and climate are afforded little consideration. Indeed, in the
instant RFP, they appear only as evaluation metrics in "commercial" contexts, such as
ownership of environmental attributes and emissions guarantees. Further, although the RFP
provides evaluation metrics for individual resource categories, it provides no guidance on
how bids within each resource category will be weighted against bids in other resource
categories. MLGW must, in its ultimate evaluation of all bids received, give strong
consideration to climate impacts. Maintaining this focus will position MLGW to respond
effectively to the global climate crisis and evolving national climate and energy policies, as
well as the declining costs and expanding capabilities in the rapid evolution of renewable
energy technologies.
(2) MLGW Should Broaden Its Consideration of Clean Energy Resources

As it seeks to identify a least-cost portfolio to serve its customers, MLGW should not
be constrained by the two preferred portfolios selected in the IRP, which reflect overly
conservative cost assumptions for renewables and overly liberal cost assumptions for
gas-burning plants. Since the IRP’s release, the costs of renewable technologies have
continued to fall, while gas prices remain volatile, with no long-term price decline predicted.
Thus, in the very likely event that responsive bids demonstrate more attractive pricing than
assumed in the IRP, MLGW should be prepared to evaluate higher amounts of renewable
resources for inclusion in its resource portfolio.
In addition, MLGW should expand its consideration of renewable resources beyond

those solicited in the RFP. As written, the RFP excludes multiple viable, low-cost renewable
resources and technologies. For example, the RFP limits energy storage bids to four-hour
batteries. The utility industry has recognized that long-term energy storage—of varying
durations—constitutes an important part of the energy mix, serving multiple functions within a
resource portfolio. These may include integrating intermittent resources, providing peaking
capacity, and increasing reliability and resiliency. Accordingly, MLGW should expand its
consideration of storage resources beyond those requested in the RFP.
Similarly, existing renewable technologies continue to improve each year, and new
renewable technologies continue to become commercially viable. Given the constant change
in the renewable energy marketplace, the Sierra Club Chickasaw Group encourages MLGW
to consider additional opportunities as they arise, and to refrain from limiting itself strictly to
the RFP responses received. Limiting its options in any way, risks locking MLGW into a
resource portfolio that captures the state of the market in 2021 and excludes future resources
that are lower-cost and more feature-rich when they become available.
(3) MLGW Should Initiate Efforts to Expand Its Energy Efficiency Program Portfolio
Energy efficiency is an abundant and emissions-free resource. A recent analysis by
the American Council for an Energy Efficient Economy indicates that, on a levelized cost
basis, energy efficiency is being procured at a comparable or lesser cost than even the
lowest-cost generation resources available today.3 Further, targeted energy efficiency
programs can accomplish critical societal goals, such as reducing emissions, improving the
resiliency of the local building stock, and increasing energy affordability. Regarding the latter
goal, energy affordability is of particular concern in the Memphis area. A 2016 report
confirmed that Memphians shouldered the highest energy burden (measured as energy bills
as a percentage of gross household income) in any of the 48 major metropolitan statistical
areas studied.4 This was true on an overall basis, as well as for low-income households,
African-American households, Latinx households, and renters. Energy efficiency is key to
reversing this trend.
The IRP load forecast reflects the admittedly conservative assumption that MLGW will
operate energy efficiency programs generating savings of 0.5% of annual sales, with forecast
load reductions beginning in 2021.5 Yet due to a lack of investment in recent years, energy
efficiency savings within the TVA system currently stand at a mere 0.02% of annual sales. 6 In
exiting TVA, MLGW has the opportunity to do better.
Including energy efficiency as a central component of its resource portfolio will allow
MLGW and its customers to tap into its unique cost-saving, climate, and affordability benefits.
Accordingly, concurrent with the RFP processes that are underway, MLGW should begin
planning to meet, and, ultimately, to exceed the savings contemplated in the IRP, as many of
its regional peer utilities have done. Such efforts should be incorporated into the stakeholder
process discussed below and allow community members to inform and evaluate program
opportunities, including the issuance of a future RFP for a major energy efficiency program
administrator. We recommend that this process maintain a specific focus on low-income and
neighborhood programs, building on existing initiatives such as the Share the Pennies
Program, and utilizing local delivery resources.
(4) MLGW Should Initiate a Stakeholder Process Immediately

Stakeholder input serves several critical functions in resource planning and
procurement processes. In the resource procurement context, stakeholders can vet
assumptions, identify barriers to participation, and provide feedback regarding whether state
and local policy objectives are reflected in the solicitation and its outcomes.7 MLGW has
already demonstrated its effective use of stakeholder advisory groups in its convening of the
3
American Council for an Energy-Efficient Economy, The Cost of Saving Electricity for the Largest U.S.
Utilities: Ratepayer-Funded Efficiency Programs in 2018 (June 2021), available at
https://www.aceee.org/sites/default/files/pdfs/cost_of_saving_electricity_final_6-22-21.pdf.
4
Drehobl, A. & Ross, L., Lifting the High Energy Burden in America’s Largest Cities: How Energy Efficiency
Can Improve Low Income and Underserved Communities (Apr. 2016), available at
https://www.aceee.org/sites/default/files/publications/researchreports/u1602.pdf.
5
IRP § 3.2.1.
6
Southern Alliance for Clean Energy, Energy Efficiency in the Southeast (Jan. 2021), available at
https://cleanenergy.org/wp-content/uploads/22Energy-Efficiency-in-the-Southeast22-third-annual-report-202
1.pdf.
7
RMI, How to Build Clean Energy Portfolios: A Practical Guide to Next-Generation Procurement Practices
(2020), available at http://www.rmi.org/insight/how-to-build-clean-energy-portfolios.
Power Supply Advisory Team (PSAT) to support the IRP process. The Sierra Club
Chickasaw Group encourages MLGW to build on the success of the PSAT and bring together
an advisory group to provide stakeholder input throughout the remainder of the RFP process.
After MLGW completes the RFP evaluation process, it should leave the stakeholder advisory
group in place to continue its support of future MLGW technology-evaluation and
decision-making processes.
Conclusion
In conclusion, the Sierra Club Chickasaw Group and the Sierra Club Tennessee
Chapter's Energy Committeestrongly encourage MLGW to: (1) effectively include
consideration of climate risk into its RFP evaluation process; (2) seek a greater range of
clean energy resources beyond the polluting portfolios modeled in the IRP, instead utilizing
more wind and solar, plus long-term energy storage, and increasing renewables' share of the
total portfolio; (3) greatly expand its energy efficiency program; and (4) initiate a stakeholder
involvement process ASAP to ensure results that are responsive to the needs and priorities
of its customers.
Thank you for your consideration of these comments. Please do not hesitate to
contact Dennis Lynch with any questions.
Respectfully submitted,
Charlie Belenky
Sierra Club Chickasaw Group Chair
901-661-8848, cbelenky@gmail.com
Dennis Lynch
Sierra Club Chickasaw Group, Conservation Committee Chair, and former Group Chair
901-361-8029, dmlynch1@gmail.com
JoAnn McIntosh
Sierra Club Tennessee Chapter, Energy Committee Chair
931-338-2530, mcijoann@gmail.com
Sierra Club Chickasaw Group Executive Committee

unanimous vote
CC: Mr. J.T. Young

Mayor Jim Strickland
Mr. Alonzo Weaver
Mr. Dana Jeanes
Mr. Jim West
Mr. Frank Fletcher
Mr. Rodney Cleek
Mr. Doug McGowen

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Tennessee Chapter, Chickasaw Group

Memphis City Councilpersons:

(1) MLGW’s Future Resource Portfolio Must Consider Climate Risk

(2) MLGW Should Broaden Its Consideration of Clean Energy Resources

In addition, MLGW should expand its consideration of renewable resources beyond

(4) MLGW Should Initiate a Stakeholder Process Immediately

Sierra Club Chickasaw Group Executive Committee

CC: Mr. J.T. Young

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