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Should neighboring electric systems merge?

Johnson City Press • Updated Nov 27, 2017 at 8:53 AM

Leaders in Johnson City and Elizabethton are studying the merger of their electric utilities as a way of stabilizing their core services in an uncertain market.

As News Editor Nathan Baker reported last week, officials with BrightRidge (formerly the Johnson City Power Board) and the Elizabethton Electric Department 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 customers.

“This could be an opportunity for two utilities that have a long history with one another,” Jeff Dykes, CEO of BrightRidge, said. “It’s a 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.”

Even though other neighboring utilities are facing the same industry challenges, Dykes said BrightRidge is not considering any other mergers. He said close relationship between the two utilities was the major factor that sparked talk of a merger.

Rates are one of the things the two systems will study. If necessary, the utilities could operate separately — under the same umbrella — until rates can be brought near enough to parity to completely merge the systems.

Elizabethton currently charges its residential customers about a half-cent more per kilowatt-hour of electricity than BrightRidge. However, BrightRidge’s fixed base rate is about $7 more. That means the average monthly electric bill for BrightRidge customer with a house using 1,200 kilowatt-hours is $1.25 more.

The Elizabethton City Council considered selling the municipal electric system to the Johnson City Power Board in 2012. While a deal didn’t materialize at the time, Dykes said conversations indicted the two municipalities were open to the idea of joining the utilities.

Merging the two public utilities 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.

Tell us what you think. Does a merger of BrightRidge and the Elizabethton Electric System sound like good idea for ratepayers?

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