Beatrice Lang
Memphis, Tennessee is home to around 646,889 people and is the largest three-service municipal utility in the nation. The average residential electricity rate in Memphis is 12 ¢/kWh, which is 0% higher than the average electricity rate in Tennessee of 12.27 ¢/kWh. The average monthly electric bill for residential customers is $173, which is 17% lower than the national average. Memphis's energy comes from nuclear, natural gas, coal, hydroelectric, and solar sources.
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What You'll Learn
Memphis's electricity costs compared to Tennessee and the US
Memphis, Tennessee has a relatively low cost of electricity compared to the rest of the state and the US. Memphis residents pay an average of $173 per month for electricity, which is calculated by multiplying the average monthly consumption of 1,411 kWh by the average electric rate of 12 ¢/kWh. This works out at $2,076 per year, which is 17% lower than the national average electric bill of $2,514.
The average residential electricity rate in Memphis is 12 ¢/kWh, which is 0% higher than the average electricity rate in Tennessee of 12.27 ¢/kWh or 12.68 ¢/kWh according to another source. However, another source states that the average residential rate in Memphis is 10.1 ¢/kWh, which is 2.08% less than the Tennessee average. Memphis's industrial electricity rate is 60.45% greater than the Tennessee average.
Memphis's electricity is primarily generated by natural gas (27-99.99%), followed by nuclear power (38%), coal (24%), hydroelectric power (10%), and solar power (1-0.01%). Memphis Light, Gas and Water is the largest electricity company in Shelby County, Tennessee, and it has been providing reliable and affordable electricity to the area since 1939.
The cost of electricity in Memphis, Tennessee, is relatively affordable compared to the rest of the state and the US. While there may be some variation in rates depending on the source, Memphis residents generally pay less for electricity than the average Tennessean or American.
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Memphis's energy sources
Memphis, Tennessee, has a variety of energy sources that power the city and the surrounding area. Here is an overview of the energy landscape in Memphis:
Memphis Light, Gas, and Water (MLGW)
Memphis Light, Gas, and Water is the nation's largest three-service municipal utility provider. MLGW supplies more than 400,000 customers in Memphis and Shelby County with electricity, natural gas, and water. The company has been providing reliable and affordable utility services to the region since 1939. MLGW's electricity rates are lower than those of comparable cities, and they offer renewable energy options through their Green Switch program.
Tennessee Valley Authority (TVA)
The Tennessee Valley Authority is a federal agency that sells electricity on a nonprofit basis to its distributors. MLGW is TVA's largest distributor, purchasing approximately 11% of TVA's power. TVA operates a solar generation facility in Memphis, supporting the city's renewable energy efforts. TVA also purchases green power from small-scale, privately-owned systems across the region, including in Shelby County.
Petroleum Refinery
Memphis is home to Tennessee's only petroleum refinery, which processes about 180,000 barrels of crude oil per day. This refinery accounts for approximately 1% of the United States' refining capacity. It produces motor gasoline, diesel fuel, and jet fuel, which are distributed both locally and to other regions.
Renewable Energy Sources
Memphis and Tennessee are making strides towards renewable energy adoption. While wind power currently contributes minimally to the state's energy mix, Tennessee was among the first in the Southeast to develop renewable generation beyond hydroelectric power. The state also produces biofuels and has renewable generation sites supporting green initiatives.
Natural Gas
MLGW purchases natural gas on the spot market and transports it to Memphis through two open-access pipeline companies: Texas Gas Transmission Corp. and Trunkline Gas Company. MLGW delivers over 60 billion cubic feet of natural gas annually to its 305,000 gas customers, ensuring a reliable supply for the region's heating and energy needs.
In summary, Memphis, Tennessee, relies on a diverse range of energy sources, including electricity, natural gas, and petroleum products. MLGW and TVA play crucial roles in delivering affordable and increasingly renewable energy to the region, contributing to the city's thriving economy and infrastructure.
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Memphis's electricity costs by season
The average residential electricity rate in Memphis, Tennessee, is 12 ¢/kWh, which is 0% higher than the average electricity rate in Tennessee of 12.27 ¢/kWh. The average monthly electric bill for residential customers is $173, calculated by multiplying the average monthly consumption of 1,411 kWh by the average electric rate.
Memphis has a municipal utility provider called Memphis Light, Gas, and Water (MLGW). MLGW provides reliable and affordable electricity, natural gas, and water services to Memphis and Shelby County residents. Their rates are lower than those of many comparable cities. MLGW's average monthly bundled electric bill is $139.21, compared to the Tennessee average of $150.22 and the US average of $150.22 for bundled services.
The cost of electricity in Memphis, like elsewhere, is influenced by factors such as the time of day, day of the year, and season. MLGW's residential electric rates are highest in August, and the highest average bill is in July. This is likely due to increased electricity usage for cooling during the summer months.
On the other hand, electricity costs during the spring and fall seasons, when temperatures are milder, may be lower as there is less need for heating or cooling. Winter electricity rates may also be lower if you primarily use other energy sources for heating, such as natural gas.
Additionally, Memphis residents can reduce their electric bills by using less electricity or by installing a solar system. Solar panel systems can help save money by reducing or eliminating monthly electric bills. The amount of savings with solar depends on factors such as sunlight hours and the size of the solar panel system.
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Memphis's electricity providers and plans
Memphis, Tennessee has a few options for electricity providers and plans. The city's utility provider, Memphis Light, Gas and Water (MLGW), offers electricity services to its residents. MLGW is supplied with electricity by the Tennessee Valley Authority (TVA), a federal agency that sells electricity on a nonprofit basis to its distributors. MLGW is the largest buyer of TVA power, purchasing approximately 11% of its power. MLGW's rates are lower than those of many comparable cities.
There are also other electricity providers in Memphis, such as BKV Energy. BKV Energy offers a range of plans, including options for apartments, smaller townhomes, and larger homes or mansions. They pride themselves on transparency and giving customers more control over their energy usage and bills.
The cost of electricity in Memphis is relatively low compared to the national average. The average residential electricity rate is 12 ¢/kWh, which is slightly higher than the Tennessee average of 12.27 ¢/kWh but significantly lower than the national average of 20 ¢/kWh. The average monthly electric bill for residential customers in Memphis is $173, which is calculated by multiplying the average monthly consumption of 1,411 kWh by the average electric rate of 12 ¢/kWh.
Memphis residents can also take advantage of solar energy to reduce their electric bills. The amount of savings with solar depends on the customer's current electricity usage and the portion of their bill that solar can offset. On average, a solar system can help break even on the investment in about 12.5 years, after which electricity costs may be reduced or eliminated.
Additionally, residents in areas with retail energy providers (REPs) have the option to switch from their standard utility to a REP. REP contracts typically offer fixed or variable rates. Fixed-rate plans offer a consistent price per kWh throughout the contract duration, while variable rates fluctuate based on the cost of generation and demand.
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Reducing electricity costs in Memphis
The average residential electricity rate in Memphis, Tennessee, is 12 cents per kilowatt-hour (kWh), which is 37% lower than the national average rate of 20 cents per kWh. While this may seem like a good deal, those bills can add up quickly over time. Over the next 25 years, you should expect to pay $67,400 on electric bills.
Install a Solar System
Solar panel systems can help you save money by reducing or even eliminating your monthly electric bill. The amount you can save is based on two factors: how much you currently spend on electricity and how much of your electric bill can be offset by solar. Based on the intensity and amount of sunlight hours in Memphis, the average electricity customer will need a 12.5-kilowatt (kW) solar panel system to offset 100% of their annual electricity consumption of 16,932 kWh per year.
On average, it will take about 12.54 years to break even on your solar investment in Memphis. After that, you may not owe anything on your electric bills. The savings from offsetting your electric bill with solar can add up fast. For example, assuming an annual increase in electricity prices of 2.1% and that you install your system with a $0-down loan, you can expect to save $2,100 in your first year, $10,800 over five years, $22,900 over 10 years, and $51,000 over 20 years.
Reduce Your Electricity Usage
Another way to lower your electric bill is simply to use less electricity. This can be achieved through a variety of means, such as turning off appliances when not in use, switching to energy-efficient appliances, or making sure your home is properly insulated.
Choose an Alternative Provider
Memphis Light, Gas and Water is the largest municipal utility in the nation, serving Memphis and Shelby County. They provide reliable and affordable electricity, with rates lower than those of many comparable cities. Their average monthly bundled electric bill is $139.21, compared to the Tennessee average of $150.22 and the US average of $150.22 for bundled service.
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Frequently asked questions
The average electricity rate in Memphis, TN is 12 ¢/kWh.
The average electricity rate in Memphis is 0% higher than the average electricity rate in Tennessee of 12.27 ¢/kWh.
The average electricity rate in Memphis is 37% lower than the national average rate of 20 ¢/kWh.
The average monthly electricity bill in Memphis is $173, which is 17% lower than the national average.
Memphis energy providers offer a range of options, including fixed-rate and variable-rate plans. Fixed-rate plans have a set price for the term of the contract, while variable-rate plans offer more flexibility but come with volatile pricing.
