BrightRidge pulls out of deal with Elizabethton

Published 2:33 pm Friday, March 1, 2019

For the time being, BrightRidge is out.
Friday, after a vote by BrightRidge’s board of directors, the electric authority based out of Johnson City pulled out of its possible acquisition of Elizabethton Electric.
In a statement released by BrightRidge, the board of directors cited a difference of opinion between BrightRidge leaders and the City of Elizabethton about the value of the acquisition, which was in the range of $29 million and $34 million, as being the primary reason for pulling out of the deal.
According to the statement, BrightRidge is willing to come back to the table with Elizabethton in the future at the city’s request.

According to Elizabethton Mayor Curt Alexander, the feeling is mutual on the city’s side of the negotiations.

City officials felt that the estimated price range for the purchase of the Elizabethton Electric was to low.

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“We immediately thought the number was low,” said Alexander. “They offered a maximum of 34 million. Our balance sheet that shows our net position, shows that our net position is around 55 million. So we were around 20 million apart on the valuation side.”

Each year, the city get payments in lieu of tax from Elizabethton Electric in the ballpark of 1 million annually. Alexander said that if BrightRidge acquired Elizabethton Electric then those payments would go down to zero after ten years.

“Our city budget could not afford that,” said Alexander. “Our budget can’t take a hit of one million dollars a year. That’s about five percent of our budget.”

Alexander said he was also concerned about the possible rate increase to Elizabethton Electric customers. He pointed to the base rate of Elizabethton Electric which is $13.29 compared to BrightRidge’s which is around $21.