- (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.

- Lead Pipes, xAI, and all things MLG&W.

Tonight, on Behind the Headlines.

[intense orchestral music] - I'm Eric Barnes with The Daily Memphian.

Thanks for joining us.

I am joined tonight by Doug McGowen, President, CEO of MLG&W.

Thanks for being here again.

- Thanks, Eric.

Glad to be here.

- We'll talk about lots of things.

We'll talk about everything I said at the top.

We'll talk about TVA.

We'll talk about, you know, it's, we're going into storm season and ice storm, potential ice storm season, but there's a big initiative that you all are trying to get the word out about around lead pipes.

And I think a lot of this comes from a, it started a federal, what, $15 billion program to, to address this around the country.

One of the things, before we go into the details, it struck me that I had to have been a kid, and that was a long time ago, when I started to hear that lead pipes are really dangerous.

And it is a bit shocking that we, as a country, 'cause this is not just a Memphis thing, we, as a country, still have not solved this issue.

So that's a strange, just, observation as we talk about it.

But what is the program itself?

- Sure.

Well, I think I'm gonna riff off of your point there, Eric.

We all know that exposure to lead can have harm, no matter what age you are.

And so that comes in many forms.

It can come from the soil, it can come from dust, it can come from paint, some of the industrial work that we do.

Lead pipes that are the service lines that take water from the water main in the street to the home, can also be a source of exposure.

We knew as far back as 1955 at MLGW that that's probably not the best material to be using, because we heard back then about the dangers of lead.

And so we stopped using lead as a material in 1955.

Here in Shelby County, in 1973, the County prohibited the use of lead in any water services, whether it was on the utility side or in homes in 1973, and it took 'til 1986 for the federal government to outlaw the use of leaded materials, - '86.

- 'Til '86.

So we were ahead of our times, ahead of the federal government.

And, you know, quite frankly, we did use that as a material in some of our service lines.

And in 2012, nobody told us to, but we began to remove them from our inventory.

So far, we've already removed more than 9,000.

And so what we're talking about today is a recent EPA order that came out and said local utility companies like MLGW have 10 years to remove any lead service lines from their inventory.

And so we were prepared for this.

We had been examining this for some time.

Our workforce is ready to continue doing this work.

We'll accelerate the work till we get it out of our systems.

So we were ready.

Other utility companies may not have been ready.

One thing I want everybody to understand first and foremost is, our water is safe.

It's the best drinking water in the country and we aim to keep it that way.

We test it 41,000 times a year.

We'll also test it for any customer who asks for it.

We know that there's some lead service lines in our system, so we actually take action every day to make sure that you're not harmed by that by putting phosphate in the water.

We treat all of our water with phosphate.

Well, what is that?

It's a corrosion inhibitor.

That's what prevents lead, if you have a lead pipe, from leaching into the water.

That is your first line of protection.

It's your first hedge of protection.

We've been doing that for decades here.

And you've heard of some other water systems who had issues.

They weren't doing corrosion prevention, and that's what caused many of their problems.

That's why our water retains the reputation as being the best in the country.

- So a couple of kind of quick questions.

One, you say you're ready, but what about the cost?

Is it gonna be expensive?

- Yeah.

- Is this gonna be rate increases?

Is this gonna be put on the property owners?

How is that gonna work?

- Yeah, so I'm really glad that you asked that, because we've always had money in our budget to do between a 1,000 and 2,000 of these a year.

- Out of how many, by the way?

'Cause you said earlier 9,000 so far have been replaced.

That's out of... - That's how many we've been doing.

We have about 300,000 services.

We have about 255,000 active services.

So we've been doing, you know, at that time, we anticipated there was about 20,000 in our system that we had to get out.

What we just completed was an inventory.

The federal government said, "First and foremost, you have to have an inventory of what is in your system."

We completed that.

It was required to be submitted to the Tennessee Department of Environment and Conservation by the 16th of October.

We met that deadline.

From that inventory, we actually put on our website, and everybody can check their own home if they would like to, the results of the inventory.

Type in your home address into, if you go to mlgw.com/waterservicelines, type in your home address, and it will zoom into your property and you'll see a circle.

And the circle will have two halves.

And it's color coded.

It will tell you what the material is for your water service line that comes from the water main to the meter, and then from the meter to your house.

Let me just explain something very briefly.

We have a 4,000-mile water distribution system.

We have 10 pumping stations, 74,000 valves, a lot of equipment, 120 production wells.

None of that is constructed of lead.

We're talking about only from the middle of the street where that water main is, to your home, the two halves of that service line.

- And again, and I got lost in the numbers, but I think it's important.

There are about how many of those pipes left?

Was it 250,000, or did I misunderstand?

- So in our service territory, we have about 300,000 water connections.

And so, of those, we anticipated that there would be about 20,000 that we knew of that were lead service lines.

I want everybody to understand, the very vast majority of our customers are not gonna be affected by this, because if your house was built after 1955 or 1973, you're probably not going to have a lead service line.

If it was built before 1955, it's a higher likelihood that you could have this.

So the very vast majority of our customers are not gonna be affected by this.

You might expect, if you live in an older neighborhood with an older home, that's the area that we're gonna be focusing on.

So, when we talk about the inventory, we're talking about 20,000 that we know of now.

We have probably a hundred thousand that we don't know what the material is made of.

We could not find a record of it.

And so we have to do more investigation.

Of the ones that we know are lead, or, in some cases, galvanized, we have to remove that.

Of the ones that are unknown, we still have some more investigations to do over the next 10 years, but we have to, in 10 years, identify what it's made of, and then we have to remove it if it's made of lead on the MLGW side.

We were not ordered by the EPA to remove it on the property owner's side.

So there are two parts of that lead service line.

From the main to the meter, MLGW installed that, and from the meter to your house, whoever built your house installed that.

We're not ordered to remove it on the private side, but we know it's the right thing to do for people who cannot afford to have it done.

So part of our 10-year program is gonna be to put a program in place for people who are age or income-qualified to apply for assistance in having that removed at the same time as we are doing that.

- And is that gonna be partly federal money, State money, local, MLGW money?

- So I'll come back to that, 'cause I think I skipped over it.

We have money in our budget enough to do the public side replacements, and that is baked into what we have in our budget now and going forward.

In order to do the private side, it's going to take a significant amount of other money to do that, and the federal government has already applied some of that $15 billion for that purpose.

Tennessee's share is $250 million of that.

We have already applied and indicated that we would like to have a $100 million of that from the State to help us do that here in- - Over that 10-year period.

- Memphis, Tennessee over that 10 year period.

That will not be enough to get it done, but we anticipate there's going to be additional opportunities to apply for federal and state money to help us get it done.

We also think that there's gonna be some incentives, potentially, at the federal level for people who are landlords, to replace it on their side, so that the renters do not have to bear the burden of an increased cost that would be potentially passed on to those renters.

- Because it's not just homes.

Apartment buildings, office buildings, stores, it could be anything.

- That's right.

- Any property.

Okay.

You're sending the mailer out.

You have a prop today.

- Well, thank you.

I would like to hold this up and say I know that everybody's been getting a lot of mailers, a lot of shiny mailers delivered.

That's right.

So this doesn't tell you who to vote for.

But after the election is over, you will receive this in your mailbox.

And what this mailer is, it will tell you the results of our inventory for your home.

It will tell you, "We believe that your service line is made of lead and we are going to have to remove it."

"We believe it's made of galvanized, and we have to determine if we're going to remove it."

"Your property has an unknown service line, "so we have to do some more work to figure out what that's going to be."

If you do not receive a postcard, go to the inventory and see if your house has a green and a green circle.

And if that's the case, you will not be receiving a postcard because you have nothing to worry about.

So that's the process.

And I'd like everybody to take a look at this.

Open it up, see what yours is made of, look at what the next steps are, and then we'll be able to go from there.

- Last thing, if people, we talked about a little bit before, if people are, for whatever reason, they're in a high-risk situation, an elderly person, someone with health issues, infant, whatever, they can bypass all this and you all will come out- - Sure.

- and test their water.

- So again, the water's safe coming out of the ground.

The water is safe when we distribute it to you.

We put phosphate in to prevent leaching.

There's some steps you can take at home if you're concerned, running the faucet for 15 to 20 seconds before you use it for drinking, always using cold water for cooking.

But if all of those things, and you still have some concerns, you can request a test kit from MLGW.

We will send it to your home with instructions on how to collect the sample.

We will collect that sample from you.

We have our own water lab and we will give you the results, just so you can be sure about the indications in your home.

- Okay.

Thank you.

With 15 minutes left, we wanna talk about some other things.

It's obviously very important, and the health risks, I think, are well-documented.

We won't go go through all that, but it's a very serious thing.

So we wanna make sure we gave a good amount of time to that.

And there'll be updates on your site, and we'll be covering, Daily Memphian, as, I mean, again, it's a 10-year project.

Let's go to, again, all kinds of things going on with MLGW.

And we just had you on in September and there's more to talk about.

August maybe we had you on.

xAI is the big, [clearing throat] sorry about my voice, xAI, the big supercomputer owned by Elon Musk, that's ramping up down on President's Island.

One of the big questions, and we talked about, we had folks from Protect Our Aquifer on with you, talking about the, you know, the millions of gallons, or what was it gonna be, 1,000,003 a day that xAI could use, pulled straight from the aquifer.

Talk then of a gray water facility, which would take treated water, purify it more so that they could run it through their computers.

That looks like it's gonna happen, and your take on that And is MLGW, I know that xAI is a partner in it, TVA is a partner in it, Nucor Steel, which is big water user down there, partners in it.

Where does MLGW fit in that gray water mix?

- It's a great question.

And also the city of Memphis, because the wastewater treatment plant also uses fresh water from the aquifer for some of its processes.

But yeah, that is a big deal for our community.

That was one of the predicates.

When we first talked to xAI about coming, we asked, A, please don't put any wells in the ground to cool your computers, please buy it from MLGW.

But, B, please join us in this exploration of using recycled water for industrial purposes, which is already under way between the City, MLGW and TVA, because TVA is a big user.

That was moving along, admittedly moving along at the speed of government, about as fast as we can make it go.

We had to figure out where we're gonna get the money and how we're gonna do this.

When xAI comes on the scene, they were very interested in doing that.

They said, "Sure, we'll join you in that effort."

So interested, to the point that they've actually filed a permit with the State of Tennessee, Tennessee Department of Environment and Conservation, for about $80 million, I believe, for a recycled water plant that ostensibly they will build and then they will provide water to other people in the area, including Tennessee Valley Authority, the City of Memphis, Nucor, should they decide, and it will be of a size that there will be excess capacity should other industrial users choose to come down there.

So that doesn't answer the question, "What's MLGW's involvement?"

Well, that physical plant will take away about 13 million gallons of aquifer water that could be used for industrial purposes.

That's gonna be its size.

It can recycle 13 million gallons.

For MLGW, we are a public utility, but we still sell the products that we serve everybody with.

So when you think about it that way, that's 4.7 billion gallons of water that we will not sell every year to customers in that area.

So we are deeply financially invested in this, because we will be losing water sales.

But that's the right thing to do.

That's the benefit of having a public utility, because we have the opportunity.

If we were for-profit, we might not be as excited, but we are your public utility, and so that's why we're willing to do that, obviously, because it's the right thing to do.

- And we'll just remind everyone, TVA's involvement is that the Allen Plant, the electrical gas fired plant down there, the old Allen Plant as well, are owned by TVA.

There's always, I think less so now it seems like, but a lot of confusion.

Sometimes people think that was the MLGW power plant.

Actually, it's the TVA plant, even though it does feed the bulk of the power to Memphis.

Correct?

- Yeah.

The Allen Combined Cycle plant is owned by TVA.

The reason people confuse it is when that old coal fire plant was there, MLGW was part of that in the early days.

But TVA took that over and they run the combined cycle plant now, and own it.

- There's been some, you know, concerns about... xAI has put these gas turbines in place.

Are you involved with that?

Is MLGW, I mean, involved with those gas turbines?

- We're involved in that to the extent that we're part of the discussions, because that first phase of the computers that they've put in, and that's how it's been described, as a first phase, will take 150 megawatts of power.

We were able to provide 50 from our existing infrastructure that we had at MLGW.

In order to do that, those turbines are making up the difference until two conditions are met.

Number one, the Tennessee Valley Authority agrees to provide them the additional hundred megawatts of power.

And I think that decision is coming soon.

And, two, there needs to be a new substation.

A substation is what takes very high voltage energy that TVA distributes, brings it down to a power level that you can actually use in your house or in a business.

So it needs a new substation in order to take on that much power.

- Would that be an MLGW substation?

- It's an MLGW substation.

And typically, we would build that for anybody.

We're building one in Collierville.

We'll be building one out in the Lakeland, Arlington area soon.

- By comparison, those cost what?

- Well, about $24 million, $25 million for a brand new substation.

Anytime we have customers' growth, we'll build the substation, then we recoup that through the rates and fees and the sales that we have.

In this case, it would take us probably two to three years to do that.

We have allowed xAI to build that substation on our behalf to our specifications.

And it is planned to come online by the first of the year, this year.

So several years ahead of time.

- The pace of development is, like you're saying, is a little bit different than what government does.

- So what that means in practice, back to the turbines, is that once that substation is in, the turbines will no longer be needed for electrical power to that part of the factory.

If there's a subsequent phase, I can't, you know, I can't forecast what somebody might choose to do, but that's the idea, is those are there until that substation is complete and until TVA provides them the additional hundred megawatts of power.

- The question's around the permitting.

You know, what I think xAI has said that, "Well, we can run those without permits for 364 days, then we have to get a permit."

It's gas.

There's some amount of pollution that comes off that.

Is that in your purview to regulate, or to to manage in any way?

- Not in our purview to regulate or to manage.

I do understand that, because of the mobile nature of these and the temporary nature of the power, I think this is the part that's under discussion, how long is temporary and how much is mobile?

I think the EPA is actually, I've read in the paper that the EPA has said, "We're gonna come in and take a look at this "to determine if we ought to make that more stringent or less stringent."

But I think the good news for us in this case is that they're moving with a lot of speed to get that substation built, which means those turbines will no longer be needed for that portion of the property.

- Are you worried?

I mean, TVA, in the last few years, there's been a lot of talk about its capacity.

It's talked about being pretty pushed to its near limits.

There were, what, talk of rolling blackouts, I guess that was a year ago, year-plus ago.

Are you worried?

I mean, xAI is one customer.

It's a big customer, it's an important customer.

But the person listening at home going, "Well, wait, I mean, you know, "are we gonna have rolling blackouts to keep the supercomputer up?"

That 150 megawatts is a lot of power.

- So I'm really glad you asked that question, because I cannot hazard the availability or reliability of power for existing customers when I bring a new customer on.

And that's the first thing I look at, is do I have the capacity to serve this customer without putting hazard on the availability, reliability of power for our existing customers?

And that's the analysis that we did.

First, for reliability.

If you add a big load like that, or whether it's generation or a big industrial taker of power, it can cause some instability in your system.

And so we have to upgrade some parts of our system, because you would expect, just like a plug that you put in the wall, if you put a lot of electric load on it, it can heat up.

Same thing happens in the bulk electric system.

So in order to handle that 150 megawatts, some parts of the system had to be upgraded, and we asked the company to do that.

So reliability is there.

- The company being TVA.

- The company being xAI.

- xAI.

Thank you.

- Now, the second part of that is availability.

MLGW, with our system, has served as much as 3,500 megawatts in our system.

That's the most we've ever provided to our customers.

In the wintertime, the peak is around 2,000 megawatts.

In the summertime, it's around 3,000 megawatts.

But on a normal day, like today, we run 1,700, 1,600 megawatts.

So there's a lot of room there.

At TVA, they have provided as much as 35,000 megawatts of power.

But on a day like today, they're providing 19,000 megawatts.

So adding 150 megawatts, I'll say it like this, 360 days out of the year, it's not a problem, because we have lots of room, right?

There's lots of extra capacity.

- Those five days, your cell phone's gonna light up though.

- Well, the five days, that's what we talked to the companies about.

It's like, "Well what are we gonna do on those five days?"

Well, we asked those companies and we enroll them in what's called a demand and response program.

And we say, as a part of the contract for serving them, is, "You must be on a demand response program."

And demand response means when demand gets high, the response is the company shuts off.

- So xAI has agreed to that?

- They come off the grid.

We have 250 megawatts of industrial customers already enrolled in demand response here in Memphis and Shelby County, and this will be another one.

The question is, for each company, "How much can you come off?"

The goal is to get them a hundred percent off the system.

I am very optimistic that we're gonna be very close to zero when we ask them to participate in the demand response.

And how do they do that?

Well, they can shut off key inessential things.

But what you'll see at this project is they have several hundred megawatts of batteries that they will be using to power the computer while we're in a demand response event.

- You've talked about, and I've kinda lost track where it stands, about MLGW maybe generating some of its own power, potentially through gas turbines, aero derivative, I think they're called, turbines.

Is that in play in all of this?

- Well, we talked about that when there was, early on in my tenure, when we worried about, okay, do we have enough, to say what happens if we get a new prospect, what happens if we have some growth?

We have to be able to meet the needs of our customers.

TVA has taken a look again at their models and said, "Okay, we think we have enough to handle the growth here."

And so that became less urgent.

But what we are interested in is helping our entire constituency and helping everybody who is served by public power.

So we will be putting in battery storage this year, starting this year and going into 2025.

That's the first element that we had never done before.

So we'll be storing energy that we can dispatch when the grid gets pressurized.

The second thing we're in discussion with is to explore solar energy here that we can use locally as a source of clean energy to help meet the demands of our local community.

- What amount of megawatts is reasonable?

A range, you know, for a solar facility that you all...

I mean, are we talking about 10 megawatts?

Are we talking about 100?

- We're talking about a...

The first increment might be 50 to 100 of solar.

So it's a substantial amount of power.

And our batteries, our first increment of batteries, will be about 20 megawatts.

But we anticipate expanding that to about 100 megawatts of batteries as a starting point.

But that's just the beginning, because you don't wanna go all in with a thousand.

It's your first foray, so we need, we have to do some learning here too.

But we are very interested in that.

Now, one thing I do wanna say, Eric, is that it's not just TVA that was worried about having enough power.

It hits all of the bulk energy providers across the entire United States.

Recently, we had, during the summer, when it was very, very hot, we went into a conservative operations mode in the Tennessee Valley.

They were actually in emergency operations over in MISO west of us and some of the areas to the east of us.

- MISO, power provider on the other side.

- I'm just using them as a one of the many large bulk providers.

So most bulk providers are being stressed, and they're challenged to keep matching the demand with new generation.

So that's why demand response is particularly important as we grow our reliance on electricity.

- We've just four minutes left, and there's so much more we could talk about.

Again, the question with TVA that I always ask you, I mean, do you look to, you're in a five-year rolling, I think five-year agreement with TVA.

There was a lot of conversation about whether the MLGW would leave instead of signing a 20-year.

Are you at a point where you're looking at other options for bulk power providers?

- I said when I got here I will leave that on the table.

But for me, and I think for our customers, reliability has got to be job one.

And I can't look past reliability for the potential to save some money on electrical power, because, as you know, the data is there that says when I arrived at MLGW, outages were twice as frequent and they lasted three times as long as they did in the year 2020.

And a lot of that is because we had deferred maintenance, we chose not to make some investments in our system.

We have the lowest rates in the country, but that cuts both ways.

That often means you don't have enough money to modernize your system, to replace things before they fail.

That's the path we're on right now.

I will always keep that option on the table for us to do what makes sense for us, but at the end of the day, reliability is job one.

Delivering power utilities reliably to our customers has got to be the priority for us.

- It's October 31st as we tape this.

We're getting into sort of potential, you know, winter storm time.

You've made a huge emphasis on what, if somebody just dropped in and heard us talking about this, like, "Why in the world are they talking about tree trimming?"

But tree trimming was really kind of, I mean, I think in the summer, you said, look, MLGW hadn't done a complete cycle of tree trimming in, what, 14 years?

- Twenty-seven years.

- Twenty-seven years.

Where are you now with tree trimming?

- We have made significant progress.

We started on September 1st of last year, and as of August 31st, our goal was to trim 1,400 miles.

We've actually trimmed 1,650 miles in that time, so we exceeded the goal by 18%, in addition to, and we're ahead of that pace starting this past September.

So we're nearly halfway done with our cycle trim.

The results are in.

Our reliability is among the best it's been in the last six years.

It's better than the last two years, and it's either number one or number two in the last six years.

So we're moving in the right direction.

- Are you spending more money than in the past on tree trimming?

- We absolutely are.

We're spending almost twice as much as we spent on tree trimming.

And the reason why is when you don't trim for seven years, you have twice as much stuff to get rid of and twice as much stuff to cut.

- The other one people talk, and we've talked about before, is street lights.

You did a big project.

Put in, what, some 70,000-plus street lights.

Where does that stand in terms of the LED?

It's not just that they're LED, they're wired, they're networked, you can talk to them.

One still sees outages.

I think, anecdotally, I will say I see a lot fewer outages, but they're still there.

Are all the new lights in the street lights, and how is it working in terms what will happen?

- All the new fixtures are in, but there are some underground power faults that we're still repairing.

These are much more sensitive to underground power.

The outages have been cut by two-thirds from where they were before, and we're saving 55% on our energy powering these lights.

So people can feel really good about that.

- What's that cost?

I mean, how many millions of dollars is that, off the cuff?

- Well, the overall project was $42 million, and the savings that we get from using less electricity are what's paying for these lights.

So that's why nobody's street light fee went up, because, literally, when you save 55-60% of your electric cost, imagine what you could do with that savings.

Well, that's what we're using to pay for the streetlight investment.

- Oh, are you...

I remember we talked about how those can have cameras on them, they can have other things on some, because, again, they're all networked, but just 15, 20 seconds here, is there talk of putting police cameras, security cameras, of ShotSpotter, that kind of thing on those?

- There's the capability there, but we're gonna work with MPD or the Sheriff's Office to determine- - So it hasn't happened.

- What they would like to do.

It is certainly a power source for them to use.

Whether they choose to use the capability of the street lights is up to them.

- Many more questions we got too, but I really appreciate it.

I appreciate you being here again, always being available.

And again, people can learn more about the lead program by going to MLGW, searching.

We've written about it.

Yeah, you're gonna get a card.

Look for the mailer and the card.

Don't throw it away, it's not election time.

But it is election time.

Next week, we'll have an election roundup of the local election with Bill Dries, Toby Sells, Abigail Warren, I think.

We've also got, we've rescheduled Police Chief CJ Davis for December.

If you missed our interview with Paul Young, and Marie Feagins recently, those you can get it at wkno.org, Daily Memphian or YouTube.

Thanks very much.

We'll see you next week.

[intense orchestral music] [acoustic guitar chords]