Two Utility Bills to Budget Now: Memphis Sewer Charges and MLGW’s Final 4% Step

Two increases, two different clocks

Memphis landlords just received news on two utility fronts, and they run on different schedules. The first is already in your 2026 numbers. MLGW says bills issued after January 1, 2026 carry a single 4 percent increase on electric, gas and water, described as the final installment of a 12 percent multi-year adjustment approved in 2023. MLGW puts the typical household impact at roughly $5 a month.

The second has not hit a bill yet. In July 2026 the Memphis City Council approved Ordinance No. 5975, which raises sewer charges. Hoodline reported a residential maximum volume fee of $126.55 and a monthly minimum of $14.55 per dwelling unit, plus a flat charge for apartment tenants of $17.45 a month from January 1, 2027 through June 30, 2028, rising to $21.80 a month from July 1, 2028. Most of the change lands on bills in 2027 and 2028.

What the city says it is paying for

Per the same report, city officials tie the increases to upgrades at the T.E. Maxson and M.C. Stiles wastewater treatment plants and to long-standing federal requirements under a consent decree with the EPA and the Department of Justice. The public notice also says the increases are meant to restore the Sewer Fund’s revenue bond rating after a recent downgrade. For an investor, the practical reading is that this is a multi-year line, not a one-time adjustment. Budget it like property tax, not like a repair.

One scope note. This is a City of Memphis ordinance. MLGW bills customers across Shelby County, Tennessee, but sewer service in Germantown, TN, Collierville, TN, Bartlett, TN and other Shelby County cities is not set by the Memphis council, so owners outside the Memphis city limits should confirm what applies to their address before applying any number below. Fayette County, Tennessee owners should do the same with their own utility.

The per-unit math

Small monthly numbers look harmless until they are multiplied by twelve and by the size of a rent roll. Here are the figures, using the reported rates.

• MLGW’s final 4 percent step. About $5 a month is $60 a year per household. If you pay the bill on 20 vacant or owner-paid units, that is roughly $1,200 a year.
• The reported $14.55 monthly minimum. That is $174.60 a year for every dwelling unit billed at the minimum.
• The apartment tenant flat charge. $17.45 a month is $209.40 a year per unit. At $21.80 it is $261.60, an increase of $52.20 a year per unit, or about 25 percent, after the July 2028 step.
• Across 50 apartment units. The flat charge totals about $10,470 a year at $17.45 and about $13,080 a year at $21.80. Whether the owner or the tenant carries it depends on how the lease and the account are set up.

Those are illustrations built from reported rates, not a quote for any particular property.

A utility increase you can pass through is a lease clause. One you cannot is a cut to your net operating income.

Who is the customer of record?

The question that decides who bears these increases is not in the ordinance. It is on your MLGW account. Our earlier piece on MLGW accounts, deposits and landlord liability covers how a utility account in the owner’s name can leave a landlord answering for charges during a gap between tenancies. The same logic applies to the sewer line. If the tenant holds the account for the full lease term, a rate change reaches the tenant. If the account is in your name during turns and vacancies, you absorb every dollar of the increase for those weeks.

The reported language that apartment owners may pass the flat tenant fee along is worth reading in the ordinance itself rather than relying on a news summary. Hoodline notes it did not fully explain the billing mechanics for that charge, so confirm the details with the City of Memphis and MLGW before changing a lease or a rent schedule.

What to do with your leases before 2027

Pull the utility paragraph from each current lease and read it for three things: who must keep the accounts in their own name, whether the lease addresses utility charges that change during the term, and what happens on move-out day. A lease written years ago may only say the tenant pays utilities, which can leave a gap if a new category of charge appears. Any change you make should be made at renewal, in writing, with notice. Tenant-facing terms are governed by the lease and by Tennessee law, so run any rewrite past a Tennessee attorney. This article is general information, not legal advice.

This is also a pricing input. If you are weighing a renewal increase, our look at flat rents and renewal strategy is a good companion, because a renter who sees both rent and utility costs rising at once is more likely to leave than one who only sees rent move.

A short checklist for the next 90 days

• List every account. For each unit, note whose name the MLGW account is in and who pays during vacancies.
• Add the new line. Put sewer in your 2027 operating budget with a second step in mid-2028.
• Read the ordinance. Confirm the rates and the pass-through rule in the City of Memphis text, not only in news coverage.
• Check your address. If you own in Germantown, Collierville, Bartlett or Fayette County, confirm which sewer provider and rate schedule apply.
• Review leases at renewal. Make utility language specific and keep copies findable.

If you own in Memphis or Germantown, TN and want to know how accounts and utility charges are handled day to day, our team can walk through it. Rates and rules change, so verify with the City of Memphis and MLGW before you act.

Sources & further reading: MLGW — 2026 rate adjustment; Hoodline — Memphis council signs off on years of higher sewer bills (July 23, 2026). Per-unit figures are Homefront’s arithmetic on the reported rates.