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Should BrightRidge and Elizabethton Electric merge?

Johnson City Press • Jan 27, 2019 at 8:40 PM

We’ve asked about this topic before, but the community learned some new relevant information last week, and we thought a refresher was in order.

BrightRidge, the electric utility system based in Washington County, and the Elizabethton Electric Department, which serves 26,000 customers in Elizabethton and Carter County, are studying a merger.

At public meetings in the past, BrightRidge’s CEO Jeff Dykes has said combining the two systems could help save costs at a time when the Tennessee Valley Authority’s rate structure for wholesale power and the declining use of electricity because a surge in energy efficient appliances are squeezing utilities’ bottom lines. Spreading out some of those costs across more customers could even help stabilize and lower rates, he said.

On Thursday, however, we learned the proposed merger would mean the city of Elizabethton will receive less revenue from a payment in lieu of taxes, or PILOT, arrangement. According to figures Dykes presented to Johnson City commissioners, Elizabethton would receive $1.08 million less annually because of the shifted payments from Elizabethton to Johnson City, a balance Dykes said was dictated by state law.

Speaking with Johnson City’s leaders, Dykes proposed a “revenue stabilization” plan, which would allocate temporary payments to Elizabethton and taper them off over several years to allow the city to adjust to the revenue loss. A report Dykes presented postulated that “natural revenue growth” could replace the lost PILOT funding.

Most of a city’s revenue comes from tax collections, mostly from property taxes and sales taxes. Natural revenue growth could mean an increase in property values and new residents to offset the missing PILOT money. It might also mean an increase in property tax rates down the road.

Discussion of property taxes always brings out passionate opinions, especially from those who may be paying more.

That’s why we want to hear from you. How should these two utilities proceed? Should BrightRidge and Elizabethton Electric merge? What’s the best option for minimizing the financial burdens on electric customers and property owners?

Send your correspondence to [email protected]. Please include your name, telephone number and address for verification. Letters may be no longer than 300 words and will be edited for grammar, style and length.

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