BrightRidge Acquisition: Elizabethton Electric holds 12 million in cash, 6.3 million in investments

Published 4:18 pm Thursday, January 17, 2019

Last week, BrightRidge CEO Jeff Dykes gave a presentation to Elizabethton City Council members about his companies possible acquisition of Elizabethton Electric.

Dykes gave council members a look at how much BrightRidge was willing to pay to acquire Elizabethton Electric and its assets. The price was in the ballpark of $28.6 million to $33.9 million. Also, according to Dykes’ presentation, BrightRidge would assume $31 million of electric system debt held by the city.

During last week’s presentation, questions were raised about how much Elizabethton Electric currently holds in cash and investments.

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According to Elizabethton Electric’s December numbers, the utility has $12,055,000 in cash along with $6,301,000 in investments.

Through payments in lieu of tax which are required by a 1945 Tennessee law, Elizabethton Electric is a part of the city’s revenue stream. For the 2018-19 fiscal year, Elizabethton Electric made a payment of $1,355,771.71 to the city. Along with its payment to the City of Elizabethton, EES also made payments in lieu of tax to Watauga ($789.30), Johnson City ($1,666.01), Carter County ($388,305.04), Sullivan County ($2,936.07), Unicoi County ($1,761.64), and Washington County ($1,321.23). Those payments are a total of $1,752,550.99.

Over the past five years, the average payments in lieu of tax to Elizabethton were around 1.4 million. If BrightRidge were to acquire Elizabethton Electric, BrightRidge would still be responsible for making payments in lieu of tax to the city but at reduced amounts. Those amounts are currently in negotiations.

Other details from BrightRidge’s presentation last week included that all 53 full-time employees with Elizabethton Electric would keep their jobs at a claimed higher BrightRidge pay scale.

Dykes and BrightRidge are also claiming that the acquisition would create operational efficiencies that could “reduce costs by $18 to $23 million for both systems.”

In the future, a possible city referendum could be held with the citizens of Elizabethton getting the final say in whether or not Elizabethton Electric would be sold to BrightRidge. Even though a majority of Elizabethton Electric’s customers live outside the city in Carter County, those customers will not get a say in the referendum since Elizabethton Electric is owned by the City of Elizabethton through a 1945 charter.