Memphis Light, Gas and Water (MLGW) didn’t have all the answers Saturday morning, but the utility tried to provide transparency in the ongoing xAI project.
MLGW co-hosted a question and answer session with Memphis City Councilwoman Pearl Eva Walker at Southwest Tennessee Community College’s Whitehaven Center, located at 1234 Finley Road. The event included a presentation by MLGW President and CEO Doug McGowen and a nearly hour-long question and answer session with community residents. Questions were submitted by guests in attendance and online.
“I think this is a good thing for our community,” Memphis Mayor Paul Young said at the start of the event. “The question for me is: How can we turn this story into something powerful for our community?”
Since the xAI project was first announced in June, the story surrounding the impending arrival of the “world’s largest supercomputer” in Memphis has raised significant concerns about the potential environmental and power impacts for MLGW and community residents. During Saturday’s event, McGowen attempted to address as many concerns as possible, but some inquiries went unanswered given the scope of MLGW’s oversight.
McGowen said xAI does not have a preferential rate for the services and is expected to pay $7 million a month for MLGW services.
Young, several Memphis City Council members and state officials attended the event, which was helped moderate by Ursula Madden, MLGW’s vice president of communications. No xAI executives or representatives were present.
Here are some of the key points raised during the meeting.
Power supply security and new grey water plant
During the event, McGowen stressed several times the importance of two main goals for MLGW related to a project of this magnitude: reliability and distribution. The responsibility of these goals, McGowen said, is to ensure that the xAI project would not impact residents and existing customers. As it stands, the project is not expected to be a hindrance to MLGW customers, McGowen said.
“Your power is more important than theirs,” he said.
During a presentation, MLGW shared information about the potential xAI campus and explained how electricity will be shared and divided to power the company’s data center. The xAI facility is located at 3231 Paul R. Lowry Road on the former Electrolux site.
The plant is south of TE Maxson’s wastewater treatment plant. McGowen confirmed that MLGW, the City of Memphis, xAI and TVA are working together on plans for a new greywater plant to help cool the supercomputer. Current wastewater treatment is through TE Maxson. The new plant will reduce daily withdrawals from the aquifer by up to 10 million gallons per day. McGowen said the new greywater plant will also be used by Nucor Steel. Nucor Steel is south of the xAI plant on Riverport Road.
The design of the new greywater treatment plant is expected to be completed in the coming weeks, McGowen said. The project and design plans require building permits and approval from the Memphis and Shelby County Planning and Development Department.
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John Zeanah, director of the Memphis and Shelby County Planning and Development Department, was present at the event and confirmed that the design plans require the necessary building permits and approvals. Zeanah also explained that the xAI facility is located in an area that has been zoned for industrial use for over 100 years. The facility is also about a mile and a half from the nearest residential neighborhood or public parks, so noise impacts are negligible.
On July 23, Brent Mayo of CTC Properties filed a building permit with the Memphis and Shelby County Planning and Development Department for the site on Paul R. Lowry Road. Also filed on July 23 were two building permits from Ohio-based contractor Darana Hybrid for the installation of electrical equipment and a refrigeration system. In April, Darana Hybrid filed a building permit for preliminary mechanical and electrical installation valued at an estimated $10,267,329. CTC Properties incorporated in Tennessee in March. The company is affiliated with xAI.
While construction continues on the site and planning for the new greywater plant is ongoing, the main contributions to the xAI project are the construction of a new substation north of the xAI facility and $1.7 million worth of improvements to nearby transmission lines. xAI uses power from an existing substation north of the former Electrolux site. As of August 1, the site’s capacity has been increased to 50 megawatts. Additionally, two gas and water mains run along Paul R. Lowry Road. xAI will use these existing lines for its own needs, according to a graphic provided by MLGW.
McGowen said xAI is paying for the transmission line improvements. The company has not received or sought incentives to finance the project. The xAI facility will be built using private financing and equity.
The new substation is expected to be completed in 2025 and would allow the xAI plant to have a capacity of up to 150 megawatts. TVA must approve any plant that consumes more than 100 megawatts. There is currently no contract between TVA and xAI.
In the meantime, 17 gas turbine generators will be used to power the plant until the new substation is built. McGowen compared these turbines to jet engines and said they are short-term solutions and are expected to be used only during peak periods. Long-term use is not expected, he said.
These generators will be used until the TVA approves the future substation, McGowen said.
“(The plant) will not use 150 megawatts all the time,” he said. “At peak times, it will.”
Environmental concerns about the xAI project in Memphis
The Environmental Protection Agency (EPA) has identified stationary gas and combustion turbines as a major source of hazardous air pollutants. During the meeting, McGowen acknowledged that environmental concerns about the turbines could be better addressed by the Shelby County Health Department, as MLGW’s studies are aimed at examining impacts on energy use and avoiding potential burdens on residential MLGW customers.
When asked about an environmental impact study, McGowen said it would have to be conducted by xAI or another company.
During the open comment period of the meeting, Sarah Houston, executive director of Protect Our Aquifer, MLGW, urged the City Council and other community stakeholders in attendance to pressure the Shelby County Health Department to hold a similar question-and-answer event to answer questions about the environmental impacts to the aquifer and the potential damage from the temporary turbine generators.
“They (the Department of Health) have been silent on all this,” Houston said.
Several residents raised environmental concerns about Memphis’ water system and potential air pollution from the xAI plant. Several residents raised concerns about the project’s timeline and the uncertainty of how long it might take to build a substation or new greywater plant, which would result in prolonged stress on the aquifer.
There was also additional criticism of xAI founder Elon Musk, with one attendee calling him a “resource despot” for violations by his other companies, SpaceX and Tesla. In 2022, the EPA fined Tesla $275,000 for Clean Air Act violations at its Fermont facility in California. In February, Tesla agreed to a $1.5 million settlement for environmental violations in 25 California counties, according to a Reuters report. Since 2023, SpaceX has come under increasing pressure from environmental groups over damage caused by its rocket launches.
During the public hearing, several residents suggested relying more heavily on solar farms and using solar power for the xAI plant. In July, the Economic Development and Growth Committee for Memphis and Shelby County approved plans for a 21-acre solar facility next to TE Maxson’s wastewater treatment plant. The $25 million solar farm is scheduled to open in 2026.
McGowen acknowledged the promotion of solar and batteries as two key components of MLGW’s existing strategy and the improvement of alternative energy sources. He also added that the two main emissions MLGW has examined from the plant are water vapor and heat.
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Emergency shutdown for xAI possible
In terms of power, demand on the MLGW grid is about 2,000 megawatts during winter peaks and about 3,000 megawatts during summer peak demand, McGowen said.
Throughout the event, McGowen emphasized that when MLGW brings a larger customer like xAI onto the grid, it must always consider two important aspects: Can MLGW generate enough power and can the utility distribute it safely and efficiently?
Commercial customers like xAI are part of the Demand Response Program (DRP). The program is overseen by TVA and is designed to reduce electricity use during peak periods or climate crisis situations such as severe winter storms or extreme heat waves. These measures apply during rolling blackouts.
McGowen said businesses in the DRP program are contractually obligated to comply with the program and reduce their energy use. Businesses that do not comply are fined, and multiple violations can result in a power shutoff. The policy is designed to charge commercial customers more than residential customers. McGowen said MLGW will likely ask residents to conserve electricity, but temporary power shutoffs are reserved for commercial customers under the program.
Neil Strebig is a journalist at The Commercial Appeal. He can be reached at [email protected]901-426-0679 or via X/Twitter: @neilStrebig
xAI Community Q&A with MLGW
So you can watch Saturday’s entire Q&A event, MLGW posted the livestream on its YouTube channel.
