Potential consolidation between two electric companies is picking up traction.
BrightRidge Board of Directors authorized to move forward with an $80,000 engineering review of Elizabethton Electric through MidSouth Utility Consultants on Tuesday, Dec. 28, according to Tim Whaley, Public & Government Affairs Director for BrightRidge.
In an email provided to the Elizabethton Star, BrightRidge states that MidSouth will take stock of the system to determine its condition and potential valuation. Before going into effect, Elizabethton City Council will have to approve a measure to share costs of the engineering study. Council is scheduled to meet again on Thursday, Dec. 14, at 6 p.m. at City Hall.
“We are pleased to begin moving forward with modeling of how the two systems would look and perform as a united entity,” BrightRidge CEO Jeff Dykes said in a statement issued to the Elizabethton Star. “We are certain that once the financial aspects are brought to light, it will quickly become evident there are a number of ways we can operate more efficiently and effectively together than we can as separate entities. These efficiencies will translate into real dollar savings for customers in both systems in the mid-term.”
According to information provided by Whaley, MidSouth projects the process of the study could take up to 12 months with a final work product, including wholesale/retail impact analysis and a consolidated system planning study.
“When we complete, we expect a thorough picture of the immediate and long-term benefits to customers of both systems,” Dykes said.
Dykes appeared before City Council in November, where city officials approved a motion to move forward with the possibility of a consolidation study between both systems. The Washington County public power provider services approximately 78,000 customers while Elizabethton Electric has over 26,000.
“The feasibility study could present a unique opportunity for the citizens of Elizabethton to unlock untapped value in the utility,” Dykes said. “At the same time, we believe consolidation would help long-term rate stability and ensure adequate reinvestment in both systems.”
The study, according to BrightRidge officials, would be a complete review of financial and technological aspects of the system. It is anticipated that if approved, both electric systems would operate separately for some period after consolidation until the systems are brought into alignment.
The engineering review would be the first step to a possible consolidation. Any official consolidation agreement would require a majority vote of the BrightRidge Board of Directors, City Council and the public at a referendum commissioned by the Elizabethton Electric System.