xAI’s plans for a water treatment plant underscore TVA’s role
xAI, Elon Musk’s artificial intelligence company, recently announced that it plans to build a water treatment plant for its new supercomputer. This is great news because it would prevent xAI from wasting the famously clean water of the Memphis Sands Aquifer, Shelby County’s only source of drinking water.
This gesture comes from the newcomer to town who clearly wants to be well received. It’s a smart move, as xAI’s announcement sparked surprising resistance and serious questions from the community, largely due to the alleged water waste, which ranks among MLGW’s five worst. If xAI intends to be a good citizen of the community, this is a no-brainer.
More: Insight: How the Greater Memphis Chamber landed Elon Musk’s xAI project
Guess who has not committed to curbing their own gigantic water waste?
By far the biggest water guzzler of all is TVA, MLGW’s biggest water waster. TVA uses around 2.9 million gallons per day to cool its power plant, which far dwarfs the 1.2 million gallons per day expected by xAI, and to make matters worse, it then dumps the water into the Mississippi River.
But it was xAI that offered to build the recycling plant, not TVA. Not only should TVA have built one years ago, but it has so far refused to work with xAI. It’s a slap in the face to Shelby County and runs counter to the worthy missions of the Wolf River Conservancy and Protect Our Aquifer.
A few questions: i) Why did MLGW not advocate for the recycling plant with TVA first, ii) why did TVA not agree to a partnership for xAI’s plant, and iii) why do we tolerate TVA’s blatant disrespect for Shelby County?
Some points to consider: MLGW is TVA’s largest customer (10% of TVA’s revenue), yet:
- TVA transfers approximately $1.3 billion of Shelby County ratepayers’ money to the Knoxville and Chattanooga economies without any local reinvestment.
- TVA has virtually no presence in Shelby County. Of TVA’s 10,000 employees, only about 40 are employed there (not the 1,000 – 10% of the workforce we deserve).
- TVA wastes by far the most groundwater,
- TVA refused to move its toxic coal ash waste outside of Shelby County, settling for a site within city limits without public input, and
- TVA prevents (2) third party testing (think (Erin Brockovich) one of the local coal ash basins, which experts believe poses a serious threat to the aquifer.
Ironically, TVA’s monopoly makes the decision whether to greenlight xAI. Thus, the bad corporate citizen has the powers that be in Shelby County to give him approval for xAI. An even greater irony is that TVA itself has an embarrassing shortage of wholesale power, contrary to the previous MLGW administration’s disproven conclusion that TVA has sufficient and reliable power for all.
This is relevant because MLGW and TVA executives are being invited to the Peabody on August 22 by the Memphis Chamber of Commerce to speak to an elite corporate audience at the Power Summit. They will be joined by executives from Ford Motor Company, which is odd since the Blue Oval is not under MLGW’s jurisdiction. Unlike TVA, Ford employs thousands of jobs in West Tennessee.
The “Power Summit” seems like something dreamed up by TVA’s local political consultant, a choreographed announcement by dropping TVA balloons – something Shelby County should be grateful for – with no regard for TVA’s long-term disrespect. The audience should expect TVA to do enough gaslighting to keep the power plant running.
There is not enough space here to rehash the results of former Mayor Jim Strickland’s taxpayer-funded audit of MLGW’s sham wholesale power tender. The conclusions were released in the final days of the Strickland administration, are peer-reviewed and in writing, though the new MLGW leadership will not claim them as the truth, likely out of deference to questionable loyalties within MLGW’s power department.
Nor is there any room here to advocate for a sensible reform of industrial water tariffs that would prevent water guzzlers from senseless waste. MLGW’s industrial water tariffs are blatantly unprofitable for the entire system, while private customers will soon have to expect a significant tariff increase.
Mr. McGowen deserves credit for xAI’s recycling efforts, and we root for him to do more, from gaining more influence and respect at TVA to championing the idea of cheaper, equally reliable electricity.
Jim Gilliland Jr. is a Principal in Diversified Trust’s Memphis office, where he focuses on portfolio management of the firm’s tax-exempt bond strategy. He has advocated for Memphis to consider alternative energy sources than the TVA.
