- (female announcer) Production funding for Behind the Headlines is made possible in part by the WKNO Production Fund, the WKNO Endowment Fund, and by viewers like you, thank you.

- The new CEO of MLG&W, Doug McGowen, tonight, on Behind the Headlines.

[intense orchestral music] I am Eric Barnes with The Daily Memphian.

Thanks for joining us.

I am joined tonight by Doug McGowen, new CEO of MLGW.

Thanks for being here again.

- Thanks for having me, Eric.

Appreciate it.

- Along with Bill Dries, reporter with the Daily Memphian.

So as we tape this on Thursday, you are, we just talked about this, 30 days into the job.

- Yes, sir.

- I guess congratulations, and careful what you wish for, right?

It has been, have you, I mean, it was quite a storm.

It was a quite the rolling blackouts, the water issues.

We'll talk about that first.

We'll talk about long-term things.

We'll talk about the big infrastructure, we'll talk about TVA.

We'll talk about everything we can get to in 30 minutes.

But let me start just with an easy one.

What went right in MLGW's reaction to the storm and all the fallout from it?

And then what went wrong, and are you beginning to try to address?

Because there will be another storm.

- Sure.

- Most likely.

And of course you have to plan that there will be.

- Well, thanks for asking the question, Eric.

I think it's important for everybody to know that we do prepare for these events and to the extent we were able to have people positioned to respond to any electrical outages, and we were also prepared for the water outage.

We had crews on standby.

It was a holiday weekend.

We knew that going in.

So we had a lot of folks on standby, ready to respond.

As you heard, TVA didn't really expect the impact of the dramatically increased load.

Nor did they expect that they would have any kind of generation assets go offline.

So what we had was a combination of a very high demand for electrical energy.

And insufficient generation caused by some of the effects of the storm.

That was, A: on forecast.

B: very short period of time that TVA had to act in order to start curtailing the load.

And when they ordered us to curtail the load, we had to do that immediately.

We had a plan, we pulled it off the shelf.

We began to execute it.

I know it was inconvenient for folks.

I know we didn't have enough heads up.

That's one of the things that we'll be talking to TVA about is how can we get more information ahead of time to let people know, because I think people understand how critically important it is to maintain the electrical grid.

But I think people would just appreciate, "Hey, if it's a possibility, could you let me know so I can plan?"

So I think when we executed the plan, we did it according to plan.

And one thing that went right was, though we did the rolling blackouts, we planned for 30 minutes.

We had about an average of an hour.

I've addressed that in some other venues like City Council, saying we automatically tripped the circuit breakers about 70% of the time.

They turn back on about 30% of the time, we had to manually flip them back on.

So that's one area that we think we can address.

But by Christmas Eve, at midnight, we had everybody fully restored.

And that is something that other large cities in the south did not enjoy.

There were still thousands of customers in other large cities throughout the south that didn't have power on Christmas morning.

So I'm very proud of the crews who worked in bitter cold to get that happen.

The other thing that went right was our water distribution system.

Yes, we had some water mains break.

Many fewer than we had in 2021.

This time we were dramatically impacted by the number of private enterprises that had water breaks, as well as fire protection systems.

The thing that went right was our pumping stations and our wells were better prepared this time to push more water into the system, to keep more people with water, to keep the water pressure higher, so that our hospitals were never at risk of having to take some pretty dramatic action.

So, because of the $50 million of investment we made in our water system, just since the last event, we were much better prepared to push a higher volume of water, which kept more people with water.

- And we'll talk more about that investment, and more money to come.

There's a $1.2 billion that MLG&W is investing in infrastructure.

But the boil water was a point of real confusion and frustration for people, I think.

Because there wasn't a sense of, what I heard from people was, "Is this just a precaution?

"Are there actually people who are sick?

I've got a child."

- Sure.

- "I'm ignoring this.

It's just a technical requirement."

Or, are there actual incidents of bad water going into people's homes?

I mean, and so that, the communication, and the level of risk associated, I think was very confusing for people that I talked to, and saw, in interacting on Daily Memphian.

- Well, I think reaching everybody is difficult, as you know, but our message was always, "This is a precautionary boil water advisory."

And it's required by regulation when our pressure gets down below 20.

We also put in every communication, "We have not detected anything in the water.

No one is sick."

This is a regulatory requirement that we issue a precautionary boil water advisory.

So we tried to do that via every means we could.

Via social media.

Every evening, I penned a letter to the community.

It was sent via emails, carried on most of the channels that we have here locally.

Mid-days, I tried to give updates to the reporter and said that very same thing to folks.

So there was never a risk at that point.

But regulatory, we had to issue that boil water advisory.

And I understand the frustration.

It happened in the middle of the night.

Folks said, "I didn't hear about it until Christmas morning when I woke up, I'd already brushed my teeth."

Everybody was fine, and didn't have to worry about that.

But we are encouraging people to sign up for our text alert system so we can push that out.

About 89,000 of our customers did get that text alert in the middle of the night, as soon as we issued the boil water advisory.

But we have many hundreds of thousands or more customers that we wish we should take advantage of that.

- All right.

Bill.

- You told the Council, I believe, that there were like 57 sprinkler systems in warehouses, logistic centers, that you had to deal with.

Each one of which puts out, am I right here, two million gallons of water?

- Well, it varies, Bill.

There's 54 that we know about that MLGW had to go secure the water to.

There were many more that the fire department received an alert that there was water flowing and they went and secured.

So there was probably fair to say there were hundreds of fire protection systems that had been affected by the very deep freeze.

I was giving an example of City Council.

Some of these that serve very large warehouses have 8-inch or 10-inch diameter pipes.

An eight-inch diameter pipe can flow at 2 million gallons a day, ten inch can do four million gallons a day.

And just to give a sense of perspective, our normal day when we pump water out of our nine pumping stations is about 120 to 140 million gallons a day.

At the peak of the outage, when the pressure was low, we were pushing about 240 million gallons out.

So double the volume.

So that gives you a sense to try to keep as many people on and the pressure up.

But so that can have a pretty dramatic effect compared to the 52 water mains that we had.

We detected those and fixed them pretty quickly.

I'm not gonna say they didn't have an effect because they did.

But combined together, that's what caused the outage.

- Is part of the follow up to this, that coming up with a better way, or a better system, rather than having to go by and, - Sure.

- Look and see if there's water coming out of the front door?

- Well, there's a lot of lessons learned, Bill.

As Eric mentioned, we will be talking, in fact, early next week, I'm going to meet with the TVA partners and other local power supply companies so that we can begin to help problem solve, making sure people get aware and heads up as much as we can with the electrical.

And on the water side, the fire protection that you're inquiring about.

Just yesterday, we had a number of local government officials who have be getting with the fire protection system companies, as well as the commercial companies that have them, say what's the best path forward?

Now, today, they're required by code to have a monitoring where it's monitored 24 hours.

The problem is, for these very old fire protection systems in buildings that may or may not be occupied, they may or may not have a system because of when they were put in.

And we also have a lot of vacant buildings that still have fire protection because those have not yet been abandoned.

There is a path to do that.

And we were talking about yesterday, how do we make sure that we can address this issue holistically and everybody coming together to solve the problem.

- There were several comments among the Council members and actually some disagreement about what this incident and TVA calling for the rolling blackouts means, in terms of the decision about whether or not Light, Gas and Water should stay with TVA or not.

Is that a legitimate factor that you see on the horizon for the utilities decision, or for its path forward on deciding this?

- There is no single factor that would influence us to make any particular decision.

I think there's a thousand things you're going to consider to make sure that you get the right answer for your community.

So I think it's just one more thing that we'll have to put into the bin of things to consider.

So again, I've mentioned how rare this was.

Once in 90 years.

We've mobilized our nation 4 times in 90 years for relatively large military conflicts.

And we think those are pretty rare.

So just to give a sense of how rare this was.

Once in 90 years.

So, once, it's something we should pay attention to, a couple of times becomes a trend.

And that's when we start to worry about the trends.

- And you originally, when the rolling blackouts hit, the edict from TVA was to reduce power consumption by five percent.

And then just before you were ready to flip the switch on it, they said no, it's 10%.

- There were two days.

On December 23rd, it was five percent.

And that's what we executed in the morning of December 23rd.

We were told to expect five percent.

On the morning of December 24th at 4:51 AM they actually issued the five percent load reduction, the emergency load curtailment program.

And 20 minutes later, they decided that was insufficient to meet the growing demand that they saw, and ordered 10%.

So we were in the middle of beginning the five percent and had to shift over to the 10% plan.

- How did you pick what would be in that five percent and then at that next five percent?

- Well, we have a plan that is adopted every year.

Our system operators look at all of the circuits that we have.

That is reviewed internally and has to be approved by the federal regulators.

So this is not a question of picking neighborhoods or anything else.

- Right.

- The only circuits we have out of the hundreds of circuits, and that's how we do this, is by cutting off individual circuits.

Each circuit serves about a thousand customers.

That's a thousand meters.

The only ones that are exempted from that are hospitals and things like the wastewater treatment plant.

So there's a few dozen circuits that are exempt.

Everybody else in the entirety of Shelby County is included in that.

- Industry, houses, apartment buildings.

And are you just trying to get, I mean, I hate to put it, the biggest bang for your buck, in terms of how you turn off circuits 'cause you - - Well, - To impact fewer people.

- Sure.

- And get more power off the grid.

- You have to get, the end goal is to get whatever percentage load curtailment they ask for.

So we have a two and a half percent plan, a 5%, 10%, all the way up to 50%.

When you reach 50%, then TVA will be making some larger decisions and talking.

They'll be taking actions on their end to curtail load in certain areas of their service.

For us, we have all of those contingencies at five percent increments.

And so you just pick a larger number of circuits to get that percentage load.

- And then, really, in the weeks here, if you live next to a hospital or an exempt thing, you might be spared your power going out, right?

- There will be those occasions where people are on the same circuit as a hospital that could be spared, but everyone is subject to this when the power goes out and it's not something we want to do, but it's something I want to just mention that it is critically important that we protect this nation's bulk electrical system and that is the grid that everybody talks about.

And the one thing that didn't happen here is a bigger impact to the nation, or the southeast part of America's grid, because that load curtailment was very effective.

We were able to restore people pretty quickly and it didn't have something that happened in Texas a few years ago, where they completely collapsed for more than a week.

- Let's stay with TVA for a second.

There was obviously, over the last year or two, probably two years, big decision about whether TVA was proposing that MLGW, it's biggest customer, sign a 20-year agreement.

There's a lot of back and forth on that.

Their consultants, counsel.

At the time you were Chief Operating Officer at the City of Memphis.

And it's a huge decision.

It impacts business, it impacts individuals.

The rates, MLGW is city-owned.

One of the few big city-owned utilities left, I believe.

Ultimately, the decision by the governor, the commissioners, excuse me, MLGW commissioners, was to not sign the 20-year agreement.

But there's all this data out there now.

There's all this consultants, there's all these questions.

Is it still on the table that MLGW would look to leave TVA?

Or is that totally off the table, as far as you're concerned?

- Well, so I think that's a pretty broad discussion when you talk about the timing.

Would that ever be an option in the next, - In the next year?

I mean, in the next few years?

- Well, I think it's too soon to tell, to be honest.

I know there's one thing that we've talked about is the Board of Commissioners has said "No, we're not going to consider that."

So therefore City Council didn't get a chance to consider that.

I know that the mayor has a consultant who is gonna have a report to say, based on her findings, was there anything that we could have done differently if we bid it in the future?

So I'm gonna wait and see what that report says and if there's any additional actions that we have to take.

But for now, I wanna be clear, we have, this is not something that would affect us anytime in the next five years anyway, out of the current agreement.

So I've said it like this to other folks, and I will say, we did an integrated resource plan for the first time in our 85-year history.

And that was the precursor to doing this RFP.

We ought to do that more frequently than every 85 years and really take a look, especially as technology comes along, as conditions change, we obviously want to take a look at that more frequently than that.

- And am I, do I remember this right, that it's a five-year rolling agreement with TVA?

So you're always five years from canceling?

- We have an existing contract with them and we just have to give them five years' notice before we would leave.

- Yeah.

- So there is no change to our existing contract, no risk that we're not going to have electrical power.

- I'll go to Bill here.

Maybe we'll wrap up TVA.

Well, you, from the COO seat over at the city, now looking back from the CEO seat at MLGW, do you think the whole process of assessing TVA and all terms was handled well?

- I think there's always an opportunity to improve any process, especially when it's the first time you've ever done it.

And so I'll look back and part of what I will do is make critical assessment of whether we actually did everything that we could have done to make it as fair.

I do think, strategically, it was as fair a process as we could put into place.

So I think there was well-reasoned people with the best of intentions who did their level best to give it a fair assessment.

- On the overhaul of Light, Gas and Water's infrastructure, it's a 5-year plan, $1.2 billion.

A lot of Council debate about raising rates in order to fund it.

And then the pandemic hits.

There are supply chain issues which are ongoing as we record this.

So the plan that was supposed to be finished in 2025, now looks like it will be completed in 2027.

Do you think that there should be any, maybe advance of city funding or any attempt to speed up the timeline on that?

- Well, that's one of the first things that I mentioned to Council and I've talked to our staff.

My first priority is to accelerate "The Way Forward" plan.

That's what the plan is called.

And we're looking for opportunities.

The staff and I have already met.

And we will meet again early next week to talk about where we can accelerate "The Way Forward" plan.

Now I wanna be clear, we are ahead of that plan in some areas, but we are dramatically behind in others.

I will use the tree-trimming example.

The issue there is not one of having sufficient funding.

The issue there is having sufficient workforce.

We have engaged the largest national tree company to be our vendor here and they could not keep up with having enough staff to get the work done for us.

So we are moving forward with other vendors as well, who will come and assist us.

And that's one thing.

As you all know, when you have overhead electrical infrastructure, the intersection of our wonderful tree canopy with that electrical infrastructure is the cause when people say, "The wind blows and my power goes out."

It's typically because there is a tree that hits that primary wire and causes a fuse or a circuit breaker, a transformer to blow.

So we have got to get ahead of that, and we're looking, we're unearthing every opportunity to accelerate "The Way Forward" plan.

- Is part of the consideration possibly bringing tree-trimming in-house, as opposed to contracting?

- That's certainly been discussed, and something we have talked about.

Now, bringing it in-house doesn't make it happen any faster in the immediate.

That may be a longer term solution, but I'm interested in immediate outcomes here.

So this is all hands on deck.

How do we get as many resources here as quickly as I possibly can to get back on schedule?

A five-year plan is a really good infrastructure investment plan.

It is pretty aggressive.

But I think people get impatient waiting for five years.

They also get impatient when that's extended.

So our job is to see what we can do to make that plan executed as quickly as we possibly can.

And that's my intent.

- And tree-trimming was something that the task force you were on as Chief Operating Officer worked on, in terms of how to approach this.

Tree-trimming can be pretty volatile for some homeowners.

- That's exactly right.

Again, I've said publicly in a number of forums, we have three choices.

We can underground all of the infrastructure and that is incredibly expensive.

We have about 40% of it undergrounded today.

The other 60% is overhead.

You're talking a price tag of multiple 10s of billions of dollars in order to do that.

And that means your rates are going to go up.

We can continue to have our wonderful tree canopy that intersects with our overhead electrical infrastructure, but you're going to continue to have unreliability.

Or, we can sacrifice some of the tree canopy to maintain that reliability.

A resource, by the way, that can grow back and is renewable.

So, we have to make some choices here.

But only one of those is a viable choice.

And the path we're moving in today is to say we have to sacrifice some of those tree canopy in the near term, to improve your electrical reliability.

And that's something that is a renewable resource that we can work on together.

- Again, when you talk about the tree trimming, that hadn't really clicked for me, I think.

Even though I know we've written about it.

That some of these trees will just go away.

Because, I mean, trimming the trees, anyone who's ever had a beautiful big tree in their yard, they come back, right?

So, I mean, how much of the $1.2 billion is towards permanent tree removal?

- I don't recall exactly the percentage of the budget.

But it's $1.2 billion.

The majority of that $800 million is in the electrical.

- Yeah.

- Area, and a bunch of that is for tree-trimming, so-- - But that's gotta be on an ongoing basis.

- It's an ongoing basis.

- It's not a five-year plan.

- But I'll be clear.

We do have an ongoing tree-trimming contract.

We always have had.

- Okay.

- What this does is accelerates that tree-trimming to get us ahead of the, because it wasn't keeping pace.

That's what this does, is jumpstarts that.

And people, I understand, "You massacred my tree because you cut the limbs off one side".

- Absolutely.

- We understand that.

So it's a tough choice, but we have to make it.

- Let's stay with electrical, streetlights.

That's a big thing, I hear that streetlights are out.

They'll be out for years, I mean, in some places.

Is that part of this $1.2 billion, or is that, where does that fall?

And what sort of priority is streetlights near the airport, streetlights, you can just, we can sit here and name lots of neighborhoods where the streetlights have been out.

- Well, the good news is, that is not really part of "The Way Forward" plan.

But separately, together with the city, we have worked and found a vendor.

They will begin work very soon.

And we'll be replacing all of the city streetlights with LED streetlights.

And that's going to happen this year.

A couple of things that I want to talk about are.

Yeah, go ahead.

- Is that replacing the ones that are working?

- All streetlights.

- So it, I'm not gonna hold you to 100%.

But the goal is, at the end of 2023, I guess we're in 99 plus percent of the streetlights will be operating and lit.

- Yes.

And the issue there is, today, with our streetlights, I have to count on a citizen or somebody seeing that the light is out and reporting it to us and then we have to go fix that.

Tomorrow, when we put the LED streetlights in, there's a lighting management system that will automatically tell us when that bulb is out.

So we will know and we'll be able to see at our operation center that there's a light out.

Yes, I understand there are thousands of streetlights that are out today.

Our team is replacing them at the rate of a thousand a month, or so.

But there's two things that's really confounding.

Or three things, actually.

One, the bulbs do occasionally burn out.

That's the downside of the incandescent bulbs that we have now.

The upside is LEDs last a lot longer.

The second two things that happen are, you have all seen them.

Drivers are mowing down streetlight poles at an alarming rate in our city.

And that's a much bigger fix.

And so, that counts for a significant percentage.

And then the folks that are doing the fiber in the right of way, the boring machines that you see on the side, those machines that snake those orange and black tubes through the ground.

That is not always precise.

And we're finding at a significant pace that they are cutting our streetlight electrical feed.

And if you see a string of lights that are out, that is very likely the cause.

Something has interrupted the feed.

It's not those individual bulbs.

It's the line has been cut somewhere.

And then we have to go find that and fix that, repair that cut, so that's something we're working on with the city as well.

- And the person who cut it, do you find that person usually, and charge them for this?

- We have to.

Well, that's a really good point.

A: we have no process today to do that, but we're working with the city to do that.

B: we have to figure out who did it, and when they did it, and was the line properly marked.

So, there's a lot there, but it's something that has become a recent phenomenon we didn't have until all of this fiber started going.

Fiber's a great thing.

But this is one of those issues that comes up and - - And really, the huge percentages of the cutting is fiber going on?

Other than the other parts.

- Yeah, when those lines are cut.

So that's a percentage.

So it's probably a quarter of the lights that we have.

- A couple minutes left here.

- Yeah, sure.

- And you feel like the water infrastructure in this latest storm that we had.

You were able to make significant improvements in it.

But because the thing that strikes me about this is that, you can have a problem in one area and it quickly cascades to the other divisions in all of this.

- Sure.

So we're gonna make improvements in every single area that we have.

One area that I wanna talk about a little bit is our gas system.

It doesn't get much attention.

But we are very far along in our "Way Forward" plan with our gas system.

We are almost all proud of the fact that other communities in the south did not have access.

They had low pressure, insufficient gas.

That was never an issue here.

Because we are uniquely positioned, there are three transmission companies we have contracts with.

That allows us to be the most competitive city in America, I think, for gas, which means our prices are low.

Means we have an abundant supply.

And our team does a really good job of managing that.

Just in the last year, our team, through aggressive management, has saved our rate payers $44 million of cost by managing our gas system very well.

That's not something that gets a lot of attention.

So I just wanted to brag a little bit about the team and their performance there.

We will continue to make improvements to the water infrastructure.

That is ongoing.

We will continue to aggressively make improvements to the electrical infrastructure.

That includes everything from hardening to replacement of infrastructure, to tree-trimming.

I'm accountable for making sure that we have reliable utilities and that's my aim.

- Just a couple minutes left.

MLGW involved with the coal.

I meant to bring this up in the TVA conversation, but the coal ash removal that is controversial, that is being moved out of the old Allen site.

Is MLGW at all involved in that?

- We are not.

- Okay, so you don't have any say over that?

Any perf, I mean.

- That's a TVA-owned process.

- Okay, okay.

- And the aquifer.

I mean obviously, the water in Memphis comes from aquifer.

Are you all directly involved in management and preservation and monitoring of the aquifer?

Or is it part of this kind of assemblage of various people who have some say in it?

- Well, there is an assemblage of people who have some say in it.

But certainly that's one of the things you'll recall, when TVA was building the Allen Combined Cycle Plant, they had intended to just put some wells into the aquifer.

Mayor Strickland at the time, and I think it was President Collins, insisted that they instead buy the water from Memphis Light, Gas and Water, so we could see how much water was being used.

I think that was a good first step for us.

But we also have invested over the last five years, five million dollars to aquifer study through CAESER at the University of Memphis.

We intend to invest another $5 million.

The city's gonna match us with $5 million.

So we can have another $10 million to understand where those potential risks are to our aquifer and so that we can manage it as a community much better.

- In terms of, I mean, you talked about gas being low, relative to other communities.

It's still very expensive for people.

Programs to help people who can't afford their bills in cold winters.

That will continue, I assume, under your - - Absolutely.

So we encourage everybody to be a part of the "Plus One" program, and to add some funding there to help their neighbors.

The "Share the Pennies" program, to help people with weatherization costs.

We have actually sought some grants for some additional weatherization, some additional help for homeowners.

And one thing I do wanna say is, there was some dialogue here about whether, or if we take grants at MLGW.

We have $197 million worth of grants we're pursuing right now.

And the issue that came up the other day was really about a loan.

And whether we wanted to take a short-term loan for infrastructure that we had cash on hand.

- At least I know you read the Daily Memphian.

So, I appreciate that.

- I just wanna be clear.

We will always pursue that in this case.

That was a loan, not a grant, so.

- Okay.

- The decision was made to not pursue that.

- We'll have you back, we'll talk more.

That is all the time we have though.

Coming up next week, Russ Wigginton, from the National Civil Rights Museum.

If you missed any of the show today, you can get the full episode on WKNO.org, YouTube.

You can get the full podcast wherever you get the podcast.

Thanks, and we'll see you next week.

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