xAI in Memphis: MLGW talks power reliability, greywater facility & more during community QA

Memphis Light, Gas and Water (MLGW) didn't have all the answers on Saturday morning, but the utility company tried to provide transparency with the ongoing xAI project .

MLGW co-hosted a Q&A event with Memphis City Councilwoman Pearl Eva Walker at the Southwest Tennessee Community College Whitehaven Center at 1234 Finley Road. The event featured a presentation from MLGW President and CEO Doug McGowen, along with a near hour-long question-and-answer period from community residents. Questions were provided by guests in attendance along with queries submitted online.

"I do think this is a good thing for our community," Memphis Mayor Paul Young said at the beginning of the event. "The question for me is: How do we turn this narrative around into something powerful for our community?"

Since the xAI project was first announced in June the narrative around the pending arrival of the "world's largest supercomputer" in Memphis has stirred significant concerns over the potential environmental and power usage impacts for MLGW and community residents. During Saturday's event McGowen tried to help address as many concerns as possible, however, some inquiries were left unanswered given the scope of MLGW's oversight.

McGowen said xAI does not have a preferred rate for service and is expected to pay $7 million monthly for MLGW services.

Young, several Memphis City Council members and state representatives attended the event, which MLGW Vice President of Communications Ursula Madden helped moderate. No senior staff members or representatives from xAI were present.

Here are some of the key points addressed during the meeting.

Power reliability and new greywater facility

Several times during the event McGowen stressed the importance of two main goals for MLGW in conjunction with a project of this size: reliability and distribution. The onus of those goals, McGowen said, was ensuring the xAI project would not impact residents and existing customers. As it stands, the project is not expected to be a hinderance to MLGW customers, McGowen said.

"Your power is more important than theirs," he said.

During a presentation, MLGW shared information on the potential xAI campus and how power will be divided up and split to power the company's data center. The xAI facility is located at 3231 Paul R. Lowry Road at the former Electrolux site .

The facility is south of the T.E. Maxson Wastewater Treatment facility. McGowen confirmed that MLGW, the City of Memphis, xAI and TVA are partnering on plans for a new greywater facility to help with cooling purposes for the supercomputer. Current wastewater treatment runs through T.E. Maxson. The new facility will reduce daily draw from the aquifer up to 10 million gallons a day . McGowen said the new greywater facility would be used by Nucor Steel as well. Nucor Steel is located south of the xAI facility along Riverport Road .

That new greywater plant design is expected to be finalized in the coming weeks, McGowen said. The project and design plans will require construction permits and approval with the Memphis and Shelby County Division of Planning and Development.

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Director of Memphis and Shelby County Division of Planning and Development John Zeanah was attended the event and confirmed that design plans would require necessary construction permits and approval. Zeanah also explained that the xAI facility is located in an area that has been zoned for industrial usage for more than 100 years. The facility is also approximately a mile and half away from the nearest residential neighborhood or public parks, so noise pollution is negligible.

On July 23, Brent Mayo of CTC Properties filed a certificate of occupancy permit with the Memphis and Shelby County Division of Planning and Development for the Paul R. Lowry Road site. Two construction permits were also filed on July 23 from Ohio-based contractor Darana Hybrid for installation of electrical equipment and a cooling system. In April, Darana Hybrid filed a construction permit at the site for preliminary mechanical and electrical installation worth an estimated $10,267,329. CTC Properties was incorporated within Tennessee in March. The entity is associated with xAI.

As construction continues at the site and the design for the new greywater facility remains ongoing, the key contributors to the xAI project are the construction of a new substation north of the xAI facility and $1.7 million worth of improvements to the nearby transmission lines. xAI is using electrical power from an existing substation north of the the former Electrolux site, beginning on Aug. 1 the capacity for the site was increased to 50 megawatts. Additionally, a pair of gas and water main lines run along Paul R. Lowry Road, xAI will tap into those existing lines for utility usage, according to a graphic provided by MLGW.

McGowen said xAI is paying for the transmission line improvements. The company has not received, nor has sought, incentives for financing the project . The xAI facility will be constructed via private financing and equity.

The new substation has a tentative completion date for 2025 and would allow for the xAI facility to reach a capacity up to 150 megawatts. TVA needs to approve any facility that uses more than 100 megawatts. Currently, TVA does not have a contract in place with xAI .

In the meantime, until the new substation is built, 17 gas turbine generators will be used to help power the facility. McGowen compared these turbines to jet engines and said they are short-term solutions and are only expected to be relied on during peak usage windows. They are not expected to be used over the long-term, he said.

Those generators will be used until TVA approves the future substation, McGowen said.

"[The facility] won't use 150 megawatts all the time," he said. "At its peak it will."

Environmental concerns about xAI project in Memphis

The Environment Protection Agency (EPA) has identified stationary gas and combustion turbines as a major source for hazardous air pollutants . During the meeting McGowen, acknowledged that enviromental concerns regarding the turbines would be better answered by the Shelby County Health Department, as MLGW studies have looked to address impact on energy usage and eliminating any potential strain for MLGW residential customers.

When asked about an environmental impact study, McGowen said that would need to be done by xAI or another entity.

During the open comment period of the meeting, Protect Our Aquifer executive director Sarah Houston urged MLGW, City Council and other community stakeholders present to put pressure on the Shelby County Health Department to host a similar Q&A event to help answer questions regarding the environmental impact on both the aquifer and potential harm from the temporary turbine generators.

"They [Health Department] have been silent on all of this," Houston said.

The enviromental concerns for Memphis water system and potential air pollution caused by the xAI facility were echoed by several residents. Several residents expressed concerns over the project's timeline and the uncertainty of how long it may take for a substation or new greywater facility to be built, forcing a longer strain on the aquifer.

Additional criticisms toward xAI founder Elon Musk were also made with one attendee referring to him as a "resource despot" for violations made by his other companies SpaceX and Tesla. In 2022, the EPA fined Tesla $275,000 for violations in the Clean Air Act at its Fermont facility in California. In February, Tesla settled a $1.5 million lawsuit for environmental infractions in 25 California counties , according to a report from Reuters. Since 2023, SpaceX has faced increasing pressure from environmental advocacy groups over damage caused by its rocket launches .

During the public comment period, several residents suggested more reliance on solar farms and using solar energy for the xAI facility. In July, the Economic Development Growth Engine for Memphis and Shelby County board approved plans for a 21-acre solar panel system adjacent to T.E. Maxson Wastewater Treatment facility. The $25 million solar farm is expected to open in 2026 .

McGowen acknowledged the push for solar energy and batteries as two key components of MLGW's existing strategy and improving alternative energy resources. He also added the main two emissions MLGW has looked at from the facility have been water vapor and heat.

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Emergency shutoffs possible for xAI

In terms of output, during its winter peak, demand for the MLGW grid is around 2,000 megawatts and approximately 3,000 megawatts during peak summer demand, McGowen said.

Throughout the event, McGowen stressed the two main parts for MLGW to always consider when adding a larger customer such as xAI to the grid is can MLGW generate enough power and can the utility company distribute it safely and efficiently.

Commercial customers, such as xAI, are part of the Demand Response Program (DRP) . The program is overseen by the TVA as a means to reduce electricity consumption during peak periods or climate crisis situations such severe winter storms or excessive heat waves. These instances are in place during rolling blackouts.

McGowen said companies in the DRP program are contractually obligated to comply with the program and reduce their energy usage. Companies that don't comply are fined, with multiple infractions resulting in possible shut off. The policy is in place to put a larger onus on commercial clients than residential users. McGowen said MLGW is likely to ask residents to conserve power, but temporary shutoffs are reserved for commercial clients through the program.

Neil Strebig is a journalist with The Commercial Appeal. He can be reached at neil.strebig@commercialappeal.com , 901-426-0679 or via X/Twitter: @neilStrebig

xAI community Q&A with MLGW

To watch the entire Q&A event from Saturday, MLGW posted the livestream on its YouTube channel .

This article originally appeared on Memphis Commercial Appeal: xAI in Memphis: MLGW talks power reliability, greywater facility & more during community Q&A