P.D. Mynatt

Mynatt

Cutline: MED General Manager P.D. Mynatt discusses the pending TVA decision on his utility’s merger with Middle Tennessee Electric Membership Corp. during a Power Board meeting Wednesday. CITYTV

Headline: TVA ruling on MED merger expected within weeks

JASON M. REYNOLDS

jreynolds@mainstreetmediatn.com

TVA may announce within weeks as to whether it has approved the proposed merger of MED and MTEMC.

The details were discussed Wednesday during a teleconferenced meeting of the Murfreesboro Electric Department’s Power Board. A link to a video recording of the meeting is available on the City of Murfreesboro’s Agendas page at murfreesborotn.gov/agendacenter. The details begin around the 20-minute mark.

P.D. Mynatt, MED’s general manager, said TVA regulators will present the merger details Monday, April 27 to a TVA regulatory group including CEO Jeffrey Lyash. The board will receive a briefing on Wednesday, May 6, and Thursday, May 7, he said. The action does not require board approval, Mynatt said. An announcement should be released on May 7, he said.

Mynatt said regulators want to do discovery on some of the savings MED had identified in the merger proposal. Most of their questions centered around savings from MTEMC “not building their complex.” Mynatt said TVA also had a question he felt was not relevant to the merger discussion on COVID-19 and “could we face it better together or separately.”

“I really didn’t think it was relevant to the merger discussions” but he said he and another official sent TVA a response on Monday. “We think the same synergies, efficiencies from combining would apply to the dealing with COVID-19.”

The Murfreesboro Post asked MED this question: “Mynatt said the TVA regulators were asking if the two utilities could face COVID better together or apart. He said he sent them a response. Would that response be available?”

The Post asked these questions of MTEMC: “TVA regulators, according to the discussion, had asked about whether the utilities could face COVID better together or apart. Mynatt told the board MED sent a response saying better together. I will reach out to MED for their response, but would MTEMC have a response on that?

“The other question is that Mynatt made a reference to most of TVA's recent questions focusing on MTEMC not building their complex. Would you be able to clarify this? Is MTEMC not planning to build the new complex off Veterans?”

Larry Rose, communications and marketing manager for MTEMC, answered the questions for his utility and MED.

“Technically, MED did not provide a response to TVA’s regulatory – this has to do with the structure of the TVA review.  Since MTEMC will be purchasing MED, MTEMC is responsible for the application and for answering any questions from TVA at this stage of the review.”

Regarding the COVID better together or apart question by TVA, Rose said, “The two organizations have been working together since the coronavirus outbreak became more widespread and are continuing to do so even more now. MTEMC views the COVID-19 pandemic as another example of how our two utilities coming together can be more resilient to a crisis when significant economies of scale are recognized. The factors that make sense for the merger also make the best case for the organizations to face the COVID-19 outbreak together.”

Rose sent the Post a copy of MTEMC’s response to TVA, and that document is available with the internet version of this story at murfreesboropost.com.

Regarding MTEMC’s plans for a headquarters building off Veterans Parkway, Rose said, “MTEMC has not made any new or final decisions regarding future facilities, but the coming together creates options not otherwise available. The most prudent approach is to wait for the outcome of TVA regulatory and then approach our facilities decision in a way that best serves consumer-members and our employees. This has been part of our ongoing dialogue with TVA.”

COVID matters

During the board meeting, Mynatt said staff would work on a proposal by TVA on a COVID-19 relief plan working with a third party, with service including help on power bills, that could cost MED $30,000 and present that to the board.

TVA announced a back-to-work special for its largest customers, who had shut down, that could provide a break for bills from April to September, Mynatt said. There are about four MED customers who could qualify because of their high usage, but qualification also depends on whether they had ceased operations. General Mills did not shut down and is running at full capacity. Rich Products shut down for a week due to a positive test and they sanitized, and during that time, MED replaced a 30-year-old transformer that was leaking, Mynatt said. MTSU saw a drop in use when they sent their students home. The Amazon warehouse is “running full-gun.” So no large customers shut down, he said.

Also during board discussion, officials said it was too soon to say if the COVID-19 shutdown was leading to customers ending their service because MED is not shutting off power during the crisis. Mynatt said the number of late payments may increase.

One official said “a few” developers told him they received notices from some of the larger, corporate restaurant owners that they will not pay rent through June or July.

Other discussion

In other business from Feb. 26, the board was updated on employee positions that had been placed on hold due to the pending merger. Rick LaLance, the city council representative on the board, asked for a review so those that were “adding undue burden on others to complete the work” could be filled. The main positions were identified as in the IT department, for which consultants were being used.

The board was presented a letter addressed to Tennessee Municipal Bond Fund and The Bank of New York Mellon to notify them of MED’s intent to prepay the outstanding balance of $3,417,000 maturing May 25.

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