$450M in Savings Calculation
Purchased Power Expense (to TVA):
$1,035,898,000 (Source: 2018 MLGW Annual Report, page M-13)
Total mWh Sales to MLGW Customers:
13,993,089 (Source: 2018 MLGW Annual Report, page M-13)
Average Cost per mWh:
$1,035,898,000/13,993,089 = $74.03
Estimated Cost per mWh for Long-term MISO Power Contracts:
$44.00 (Source: independent studies; also see MISO LMP webpage link)
Power Cost Savings per mWh:
$74.03-$44.00 = $30.03
% Cost Savings:
$30.03/$74.03 x 100 = 40.56%
Total Savings:
$30.03 x 13,993,089 = $420,212,462.67 per year
The $450M figure from the independent studies assumes that by the end of the five-year notice period, which would likely be 2026, the power demand in Memphis will grow to 15,000,000 mWhs per year, versus the 13,993,089 in 2018 (above).
Total Savings That Could be Used by Memphis: $30.03 x 15,000,000 = $450,450,000 Per Year