Weather, plant closing affects EES bottom line

By Bob Robinson
Star Staff

   The Board of Directors of the Elizabethton Electric System (EES) were told last night that "shirt sleeve weather" this winter has reduced EES sales revenue.
   Electricity sales revenue dropped almost four percent from the previous year, Tom Whitehead, director of accounting and finance, told the board. EES gained 70 new customers the past 12 months.
   EES net income in December 2001 totaled $130,065, compared to $216,329 in December of 2000, Whitehead said.
   Year-to-date, EES net income totaled $341,637 in December 2001, compared to $699,406 in December 2000.
   The financial impact of the closing of Alcoa's Elizabethton operation in June will further impact the EES bottom line.
   EES will stand to loose approximately $200,000 in electric sales revenue from Alcoa, in addition to the 250 jobs lost, Phil Isaacs, EES general manager, told the board.
   In response to a question from board member Janie McKinney concerning a decline in EES revenue, Isaacs said "layoffs at EES are not anticipated." Some contract labor projects, such as tree trimming, have already been scaled back to reduce expenses, he added.
   Year-to-date, EES maintenance expenses, totaling $946,402 in December 2001, increased 63 percent over the previous year.
   Isaacs attributed the increase to work performed at an EES electric substation on the Bristol Highway and flood damage restoration.
   Isaacs said EES crews will soon be relocating electric lines for the widening of Highway 91 from the Gilbert Peters Bridge to Highway 19-E (Bristol Highway). The bid on the highway project will be let in February.
   EES will begin another large project in Hampton soon, he added.
   EES budgeted capital expenditures for the fiscal year total $2,265,800. As of Dec. 30, 2001, expenditures were 32 percent of the budgeted amount.
   In December 2001, EES investments totaled $2,555,611, including Certificates of Deposit paying interest rates ranging from 3.85 percent to 2.25 percent interest for maturity in 180 days.
   In other business, the board approved in-lieu-of-tax payments, totaling $674,635 to the City of Elizabethton and $192,645 to Carter County government. Payments are for the period July 1, 2001 through June 30, 2002.
   In addition to McKinney, members of the EES board are Gary Nave, chairman, Howard Matherly, vice-chairman, Shirley Hughes, secretary/treasurer, and Richard Sammons. Vice Chairman Matherly was unable to attend last night's meeting.