This is the second piece in MLK50’s ongoing series about how utility cutoffs impact working-class Memphians.
Memphis Light, Gas and Water Division has one of the highest utility cutoff rates in the nation, with nearly one in five Memphis households experiencing at least one disconnection in 2025.
This high rate was due in part to systemic issues, like Memphis’ high levels of poverty, its aging housing stock and the energy burden caused by its extremely hot summers. But MLGW’s billing structure, fee schedule and payment policies also disadvantage low-income households, making them more susceptible to cutoffs than wealthier residents.
MLGW’s combination of services can also pose challenges for residents struggling to pay: When they fall behind, they risk getting their power, gas and water all cut off.
“(Utility) disconnection drives folks down the cycle of predatory debt, and it puts folks at risk in terms of their immediate health,” said Jonathan Kim, a researcher with the nonprofit Energy and Policy Institute. “The ultimate goal of disconnection is a threat to coerce predominantly low-income families to pay money.”
How do MLGW cutoffs work?
When MLGW customers receive a utility bill, payment is due in 12 business days. A 5% late fee is applied after this deadline passes. But if a customer can’t pay their bill in full, what happens next depends on their customer rating — a metric determined by their credit score and MLGW payment history.
“A-rated” customers can accrue up to $400 in unpaid utility debt before they receive a cutoff notice. “B-rated” customers with lower credit scores and past failed payments can only keep an unpaid balance up to $200 on their account. In two responses to questions, MLGW did not provide a precise credit score cutoff for these ratings.
Once a customer’s outstanding balance reaches the threshold that corresponds with their rating, they receive a cutoff notice, MLGW spokesperson Stacey Greenberg told MLK50: Justice Through Journalism via email. Customers then have 10 business days to pay down the balance before MLGW begins cutting off their utilities.
“For disconnects, we do a one-service disconnect first, which is electricity,” Greenberg said. Seven days later, if no payment is received, the company cuts off natural gas to the home. Finally, MLGW policies state that water service can be cut off starting 20 days after electricity is disconnected.
MLGW policies disadvantage low-income customers
Being an “A-rated” or “B-rated” MLGW customer can determine how quickly one’s utilities get cut off. As of July 2025, the average MLGW customer’s monthly bill was $287 — high enough to put B-rated customers over the cutoff threshold.
Customers’ ratings also determine what extra costs they are asked to pay. B-rated customers have to pay a deposit when they open a utility account. A-rated customers typically aren’t charged a deposit to start service.
“It’s disadvantaging your lowest-income customers,” Kim said of this tiered system. “You’re just placing (an) additional burden on the people that have the least bandwidth to deal with it.”
MLGW has some programs in place to delay or prevent cutoffs — but many of them are only available to customers who are already in good financial standing.
For example, according to MLGW’s website, its Holiday Bill Break program pauses cutoffs between Dec. 15 and Jan. 14 — but only for those with utility debt under $400.
Seniors and disabled customers need an unpaid balance below $200 to qualify for MLGW’s winter shutoff moratorium during the coldest months of the year. If they can’t pay their debt down to below that amount by Nov. 30, they’ll be excluded from the program for the rest of the winter.
To access a payment plan, customers must pay 25% of their cutoff notice amount within 4 days after its due date. Customers who manage to make that payment receive an 8-day extension on the remaining balance.
MLGW’s fees also target customers who are already struggling to pay their bills, making it harder to get caught up. They include a $30 fee for returned checks, a $58 fee to reconnect services after a cutoff, and a 5% late fee on bills not paid within 12 business days.
Combined utility services make bills harder to pay
MLGW is “the nation’s largest three-service municipal utility,” meaning it combines electricity, water and natural gas under one service umbrella. The company also collects fees for some city services, like trash collection and streetlight repair. But this all-in-one arrangement can create challenges for Memphians struggling to keep up with bills.
In many cities, utilities are provided by different companies. While this can make paying bills more of a hassle, it also allows cash-strapped customers to choose which services to prioritize. For example, falling behind on natural gas bills to pay electric bills in the summer can keep the air conditioning on when gas heating isn’t needed.
“Bill switching is a very, very common method for folks to keep their (overdue payments) more reasonable,” Kim said.
But in Memphis, customers don’t have the option to pay for one utility without paying for another. MLGW bills break down the costs of various services, but the total can only be paid down as one balance.
“Customers who fall behind are responsible for the combined balance, which can make it more difficult to catch up,” MLGW said.
Has MLGW cut off your lights, water or gas? MLK50 wants to hear your story — even if you choose to remain anonymous. Contact the author of this piece by emailing natalie.wallington@mlk50.com, calling or texting 901-633-4598, or reaching out securely to @nataliew.901 on Signal.
Natalie Wallington is the housing reporter for MLK50: Justice Through Journalism. Email her at natalie.wallington@mlk50.com.
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