With a possible merger between BrightRidge and Elizabethton Electric on the horizon, members of the Elizabethton City Council got a chance to hear some of the details if the transaction was to happen Wednesday at City Hall.
BrightRidge CEO Jeff Dykes walked council members through the many aspects of the possible merger.
The biggest piece of information was a range on how much BrightRidge would shell out to acquire the Elizabethton Electric system and its assets. BrightRidge would pay in the ballpark of $28.6 to $33.9 for the merger. Also according to the presentation by Dykes, BrightRidge, would assume “$31 million of electric system debt currently held by the city.”
Another big detail from the presentation was that all 53 full-time employees with Elizabethton Electric would keep their jobs at a claimed higher BridgeRidge pay scale. The Dykes’ presentation also claimed that the merger would create operational efficiencies that could “reduce costs by $18 to $23 million for both systems.” Dykes said that these reduce costs would translate to better rates for customers.
Also on hand during Wednesday’s workshop was Chris Mitchell with Chris Mitchell Management Consultants and Scott Cochran with Fisher Arnold. Both of the above-mention individuals and their firms were commissioned to conduct studies on the merger and its effects.
During his presentation, Mitchell noted that if the merger between Elizabethton Electric and BrightRidge happened, that customers over the first five years would not see a rate increase the first year but would see an annual increase of $13.75 during years two through five. After being asked what would happen in regards to rate increases if Elizabethton Electric didn’t merge with BrightRidge, Mitchell said that due to the financial stableness of the Elizabethton system that customers possibly wouldn’t see a rate increase over the next five years.
“You know, your finances are very good and so are BrightRidges’, so I am not going to sit here and tell you that you would increase rates,” said Mitchell to the council. “You are very healthy and it is likely that you wouldn’t have an increase.”
Mitchell, however, did note that other variables out of Elizabethton Electric’s control such as the Tennessee Valley Authority raising their rates could force Elizabethton Electric to raise rates.
According to the presentation by Dykes, the merger would save local industries money. Starting the first year, Dykes said the following companies would have the following savings in electrical costs:
—Snap-On Tools: $360,031
—Watauga Quarry: $73,523
—Mapes: $45,962
—Borla: $44,138
The merger would also bring BrightRidge Broadband to the Carter County area.
If the City of Elizabethton and BrightRidge were to finalize an offer then there would be a city referendum in which the citizens of Elizabethton would get to vote whether or not the merger would happen.