Merger could bring close electric systems closer
Jeff Dykes, CEO of BrightRidge, which until last month was known as the Johnson City Power Board, said merging BrightRidge and the Elizabethton Electric Department was a natural thing to study.
The two utilities serve neighboring communities and face similar challenges from the Tennessee Valley Authority’s changing electric rate structure and stagnant revenues thanks to increasing energy efficiency and new power generation technology available to home users.
“This could be an opportunity for two utilities that have a long history with one another,” Dykes said. “It’s natural fit between two communities and systems, and with the changes in our industry, it’s the proper time to be looking at something like this.”
In 2012, facing a rate hike for power customers, the Elizabethton City Council considered selling the municipal system to the Johnson City Power Board.
The deal didn’t materialize, but Dykes said conversations showed the two municipalities were open to the idea of joining the utilities.
Should they join, which would require a public referendum of city voters, a majority vote of the Elizabethton City Council and an affirming vote by BrightRidge’s board of directors, Dykes said efficiencies would likely be found through the shared administration and resources.
He said substations along the border of Washington and Carter counties could be used to spread out the load, especially in areas where customer demand is growing.
Currently, Elizabethton charges residential customers about a half-cent more per kilowatt-hour of electricity than BrightRidge, but BrightRidge’s fixed base rate is about $7 more. For a house using 1,200 kilowatt-hours in a month, an approximate average for the area, the BrightRidge bill is $1.25 more.
Rates are one of the many factors the commissioned study will consider, Dykes said. Should it be needed, the utilities could operate separately, but under the same umbrella, until rates can be brought near enough to parity to completely merge the systems.
Dykes expects the study, the costs of which will be shared by BrightRidge and Elizabethton, to take a year while engineers and financial consultants dig into both companies’ records.
If the study shows a merger is feasible, Elizabethton would then need to schedule and hold a public referendum.