The city council of Murfreesboro, Tenn., on Jan. 9 approved Middle Tennessee Electric Membership Corp.'s $302.35 million acquisition of the city's electric system and operations.
The Murfreesboro City Council passed a resolution to clear the cooperative, known as MTEMC, to purchase the Murfreesboro Electric Department, according to a Jan. 9 news release. MTEMC will pay the city $43 million upfront once the deal closes and the remaining amount in annual increments over 15 years at 3.3% interest.
The deal will need to be approved by MTEMC's board of directors, while the Tennessee Valley Authority, which supplies power to both utilities, will need to sign off on transferring Murfreesboro's power purchase agreement to the cooperative.
MTEMC and the Murfreesboro Electric Department said customers' electric rates and the reliability of electricity delivery will not be affected by the merger. The companies believe that the merger will be a positive influence on future rates and service.
"Utilities are built on the benefits of economy of scale," Murfreesboro Electric Department General Manager P.D. Mynatt said in a news release. "So, this merger benefits the ratepayers by enhancing efficiency and allowing for future system improvements."
All employees at the Murfreesboro utility will be offered positions at MTEMC, according to the news release.
MTEMC approached Murfreesboro city officials in May 2019 about potentially acquiring the municipal utility.
MTEMC serves nearly 230,000 customers, while the Murfreesboro Electric Department, which is within the other utility's service territory, provides service to more than 65,000 customers.