Memphis’ antiquated TVA contract keeps community from getting power from the sun

by Tom Hrach, Tennessee Lookout
February 19, 2025

(This story was originally published by The Institute for Public Service Reporting – Memphis.)

Memphis Light Gas and Water is taking some baby steps this year to create its own solar power system, but a major hurdle stands in the way: an antiquated contract with its power supplier.

MLGW’s exclusive power contract with the Tennessee Valley Authority forbids the city-owned utility from getting electricity from anyone but TVA.

Among 153 local power companies served by TVA, 148 have signed 20-year, long-term agreements with TVA that allow them to generate up to 5 percent of their electricity on their own. Memphis is one of the five without the long-term contract, preventing the utility from generating its own electricity. 

“The community needs more energy. The demand is going up. Where are we going to get it? We do not want to burn more fossil fields, so solar is where it can come from,” said Dennis Lynch, Midtown Memphis resident and member of the MLGW citizens advisory committee.

“I could imagine many empty blocks in Memphis covered with solar panels and then people signing up to be members and getting reduced rates for electricity, but even that is not allowed in the current TVA contract.”

MLGW operates under a rolling five-year contract with TVA that dates to December 1984. That contract in Section 2B states, “TVA shall be entitled to serve directly any consumer to whom said resale rate schedules are not applicable.” The contract also states TVA retains the right to provide power to other types of customers such as the federal government and any large user of electricity. The 1984 language prevents MLGW from getting power anywhere other than TVA.

Status of a long term agreement

In 2022, MLGW discussed a 20-year long-term agreement with TVA to provide electricity to Memphis, which would have allowed the creation of its own solar power system. But that long-term agreement was never signed, so the terms of the 1984 agreement remain in place. In May 2023, MLGW CEO Doug McGowen announced that the utility would stick with TVA as its power supplier under the terms of the old contract for now.

Was that a mistake?

Not so, said Stephen Smith, executive director of the Southern Alliance for Clean Energy. That is because committing long-term to TVA means Memphis would likely never be able to get out from under TVA due to the onerous exit clauses in such a contract.

Under the terms of the current contract, MLGW must give TVA a five-year notice if it wants to leave. The long-term contract would have required a 20-year notice, which means it would be decades before Memphis could get out from under TVA.

“MLGW is losing out on clean energy, particularly, solar due to the fact that they are not independent from TVA,” Smith said. “But I do not think that signing a long-term contract would be worth it. Memphis would lose out by agreeing to stay with TVA for so long.”

One reason is that the 5 percent limit TVA places on its long-term customers is miniscule compared to the potential for solar power in West Tennessee, Smith said. 

“MLGW did absolutely the right thing by not signing that long-term contract. Instead, we would like MLGW to start re-negotiating that agreement again and start using the leverage it has to encourage the use of renewable energy,” Smith said.

Baby steps to solar power

At the Oct. 2 MLGW board meeting CEO Doug McGowen outlined the capital improvement projects for 2025. He said the utility is doing what it can to move toward solar power by installing the first-ever battery storage system. 

McGowen has acknowledged MLGW is prevented from creating its own solar power because of the current TVA-MLGW contract.

“We are still committed to that. I want to get the battery storage rolling first,” McGowen said at the Oct. 2 meeting. “We have some architecture and engineering money allocated for solar. We are working with our partners at TVA to determine how to do that in the constraints of our current contract. That remains a priority for us.”

Solar power would be part of what McGowen called “an aggressive expansion of capacity” to provide electricity for Memphis. At the most recent MLGW board meeting on Feb. 5, McGowen noted that the request for proposals for the battery storage would be out soon. But he offered no exact timetable. McGowen has said Memphis needs to expand the ability to provide electricity for economic growth

The best example is the establishment of the xAI facility in south Memphis, which has huge power demands. Bloomberg News reported that new artificial intelligence data centers can be drivers of economic growth for communities, but they have huge power demands. Communities that are prepared to provide increasing amounts of electricity will be the beneficiaries. And part of providing increasing amounts of electricity is that local communities need to be generating their own power instead of just buying it from someone else.

Battery storage is pivotal to plans for solar power because the sun does not shine at night, so the electricity must be generated during the day and then stored for use at other times. But a battery storage system is only the first step toward using the sun to generate electricity. 

Memphis falling behind

Scott Brooks, senior relations specialist for TVA, confirmed via email that Memphis is way in the minority when it comes to developing its own power generation, writing, “Many of our partners are doing solar and community solar.”

Other TVA communities that are generating their own solar power are the Knoxville Utilities Board, BrightRidge (which serves the Tri-Cities area of Tennessee) and the Nashville Electric Service.

A 2023 study done by the Southern Alliance for Clean Energy titled “Solar in the Southeast” confirmed that Memphis was far behind Knoxville and on par with Nashville when it came to using electricity generated by the sun. 

The same study showed that Memphis will be even further behind Knoxville by 2027 if things stay the same with the TVA contract. And Tennessee, which is entirely served by TVA, is miles behind the average utility in Florida, Georgia, South Carolina and North Carolina.

The goal of creating Memphis’s own solar power system is not new. It was part of the Memphis Area’s Climate Action plan written in 2020. That 222-page plan said: “Transforming our energy supply over the next 30 years will need to take an ‘all-of-the-above’ approach, with actions ranging from partnering with TVA to increase renewables in their portfolio, to encouraging and constructing local sources of renewable generation (particularly solar).”

The plan said the city of Memphis and Shelby County would work with TVA to explore changes to the MLGW contract. The report mentions solar power 35 times as a key goal for the community.

Yet more than five years since that report, no progress has been made toward establishing a local solar power system in Memphis.

Some solar power exists

Despite the restriction, solar power is not absent in Memphis. The TVA contract does not prevent companies, individuals or even government entities from putting up solar panels and generating power. The biggest solar project in Shelby County is happening at the Agricenter where thousands of vehicles whiz by five acres of solar panels on Walnut Grove Road.

That project launched in 2012 is generating enough electricity to power 110 homes per year. And it is connected with TVA’s system, showing the potential for solar power in Memphis. Shelby county government also generates electricity with the establishment of its modest collection of solar panels off of Farm Road behind the county code enforcement office.

How can Memphis start maximizing the benefits of solar power?

Citizen action is what is needed to change the situation, said Lynch, a frequent public speaker at MLGW board meetings and member of the West Tennessee Sierra Club.

“Citizens need to better understand what is the story,” Lynch said. “They need to knock on the doors of MLGW and ask what MLGW: What are you doing to allow TVA to allow us to install solar?

Tennessee Lookout is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Tennessee Lookout maintains editorial independence. Contact Editor Holly McCall for questions: info@tennesseelookout.com.

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SUMMARY: On a challenging weather day, storm tracker Payton Kennedy reported from I-40 West into downtown Nashville. She observed hazardous conditions, including two back-to-back accidents near the airport and another vehicle that slid off the roadway at the I-40 and I-24 split. While visibility has improved and snowfall has stopped, roads remain slick and icy, with temperatures at 21°F. Despite the conditions, many cars are still on the road, necessitating caution and slower driving to navigate the slushy and icy surfaces in Davidson County.

Road conditions along I-40 in Davidson County.

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Tennessee levied $44.78 million in penalties against private prison operator in three years

by Sam Stockard, Tennessee Lookout
February 19, 2025

Tennessee’s Department of Correction is requesting a $6.8 million contract increase for its private prison operator despite penalizing the company $44.78 million since 2022 for contractual shortfalls, $15 million in the last five months alone.

Correction officials told lawmakers Tuesday that Trousdale Turner Correctional Center, which is under a civil rights investigation by the Department of Justice, has a 33.7% vacancy rate for prison officers compared with 26% at state-run prisons. The facility is one of four prisons operated by CoreCivic, a publicly-traded company that runs facilities nationwide.

Trousdale Turner sustained a 146% turnover rate in 2023, making it more difficult to check on prisoners and avert safety risks.

“None of this makes sense where the state is increasing the amount it’s paying CoreCivic every year but also penalizing CoreCivic for not meeting the terms of the contract,” said Democratic Sen. Jeff Yarbro of Nashville. “It seems that we need to really take a close look at what’s being required in these contracts where CoreCivic’s falling short and what we can do about it.”

CoreCivic refuses to disclose what it pays officers, and in some instances when it has personnel shortages, it brings in officers from other states to boost staff. 

Yarbro considers that a “transparency” problem and said CoreCivic has the resources to increase officer pay and benefits to meet the terms of the state contract. Tennessee boosted prison officer pay by 35% two years ago.

Correction Commissioner Frank Strada continued to defend CoreCivic after a budget hearing Tuesday, calling the company a “partner” for the state and saying the prison system has monitors who determine whether the privately-run prisons are meeting contract demands. He said the CoreCivic prisons have seen a decrease in violent incidents and contraband but provided no statistics to back up that assertion.

“They are doing what they can for progress,” Strada said after the Senate State and Local Government Committee approved his budget request.

The state pays CoreCivic about $240 million annually despite audits detailing low staffing, violence, deaths and other problems. Tennessee’s overall prison budget could jump $91.6 million to $1.4 billion if lawmakers approve the department’s request.

Strada said the $6.8 million increase for CoreCivic is based on inflation, not a pay raise.

In spite of the increase in penalties against the company, Strada said his department is “holding them accountable.” He said CoreCivic has corrected 90% of the findings in a state audit conducted more than two years ago.

The total number of deaths in CoreCivic prisons from 2019 through 2022 was 221, more than a third of the 645 deaths reported in the entire state 14-prison system, including facilities for women, according to department figures. More than half of the prison system’s drug-related deaths in that time frame took place in the four private prisons out of 143 drug-related deaths overall. The department did not give death statistics for all of 2023 and 2024.

The Department of Correction provided information to the Tennessee Lookout Tuesday showing the state has levied fines totaling $44.78 million against CoreCivic since 2022, up some $15 million since last October. Those include $15.4 million assessed against Hardeman County Correctional Facility, $6.3 million against South Central Correctional Facility, $10.8 million against Trousdale Turner and $12.15 million against Whiteville Correctional Facility, according to the department.

An inmate died at Hardeman County Correctional Facility and several others were injured in December 2024. 

Separately, a lawsuit was filed against CoreCivic last year claiming an inmate died of a drug overdose stemming from understaffing and a prison drug ring, according to news reports. The lawsuit said 418 calls for help were made about overdoses over three years at Trousdale Turner and that staff profited by allowing drugs to be smuggled into the facility.

CoreCivic declined to comment on the lawsuit at the time, but said it has a zero-tolerance policy for contraband.

A Tennessee law dating back to the 1980s when the company was founded as Corrections Corporation of America allows the state to have only one privately-run prison. The company gets around that law by contracting with counties where the prisons are located.

Since 2009, the company has spent $3.7 million on lobbying and campaign donations in the state, a Lookout analysis found.

Tennessee Lookout is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Tennessee Lookout maintains editorial independence. Contact Editor Holly McCall for questions: info@tennesseelookout.com.

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