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MEMPHIS, Tenn. — Memphis Light Gas & Water struck back at what it called “misinformation” by environmental groups regarding the electricity supply for xAI, the new supercomputer operating in the city.

The letter, addressed to the TVA board of directors by MLGW Vice President and General Counsel Jennifer Sink, is a response to accusations by environmental groups who are opposed to the Memphis public utility providing a massive amount of electricity the facility will need.

This week, the Southern Environmental Law Center, writing on behalf of several groups, said they had concerns about MLGW’s ability to reliably supply 150 MW of power. They also said MLGW had failed to obtain approval from its board or the Memphis City Council before proceeding with the project.

xAI, an artificial intelligence company founded by Elon Musk, will need some 150 MW of electricity to power the Memphis facility, an amount the SELC said could power 100,000 homes. Billed as the world’s largest supercomputer, the southwest Memphis facility went online earlier this month.

But MLGW said in the letter that, contrary to what SELC claims, the utility is not required to obtain approval from its board or city council.

“… MLGW is a public utility and the sole provider of utilities in the City of Memphis, and by law, cannot discriminate or withhold or refuse service which can reasonably be demanded and furnished,” Sink wrote.

MLGW also says that, with the $1 billion in upgrades it is making to its electrical system, “we anticipate no impact on the reliability of distribution/transmission of electric power to our other customers.”

They also deny that MLGW is subsidizing xAI, saying that the company will pay the same electricity rate as other companies, and has not requested any deals.

The cost of the infrastructure improvements being made to support xAI will not be felt by MLGW customers, Sink wrote.

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To accommodate xAI’s electricity needs, MLGW will increase the capacity of a nearby electric substation to 50 megawatts by Aug. 1, at a cost of $760,000, MLGW CEO Doug McGowen told city council members Tuesday.

The artificial intelligence company plans to build another electric substation with 150 megawatts of capacity by 2025. xAI will be reimbursed for construction with a monthly “margin allowance” worth about $24 million total, McGowen said.

The new substation will require approval by the board of the Tennessee Valley Authority.