EES investments altered by 'unstable' market

By Julie Fann
Star Staff
jfann@starhq.com

  
Elizabethton Electric System board members on Tuesday decided to do a short-term reinvestment of several maturing CDs that are being used to increase savings toward a goal of debt reduction. For the past two or three months, the board has debated what would be the best decision. EES Manager Phil Isaacs asked board members for their help.
   "We've done quite a bit of talking and research about doing a long-term five-year investment, and I'd just like some direction from you folks," he said. Gary Nave, board chairman, said he thinks that long-term investment to reduce debt is a good idea. The first step, though, he said, should be to determine the amount of money available and then what plan is best.
   Board member Shirley Hughes said she felt it was a good idea to work toward debt reduction, but not to the point where EES ends up having to go into the borrowing market again, and long-term investing might precipitate that. On that note, board member Janie McKinney said she wasn't in favor of long-term investments right now.
   The board discussed other factors that make long-term investment unstable, such as reduced revenue growth. EES has 150 new customers this year, an increase of only 1.5 percent. The board also said they need to look at the current electric situation as though nothing will replace the Alcoa Water Plant once it is closed.
   As a result, the board decided to take several CDs that have recently matured or that will mature soon and place them in a 180-day passbook savings account, where they will draw interest at a rate of 2.65 percent. Isaacs feels that, after talking with City Financial Director Brad Moffitt, investing over the long-term is risky right now due to the market being unpredictable. "I just don't want to be sitting here three years down the road with a long-term investment and no funds," he said.
   Isaacs also mentioned that the only spending that occurred this month was $48,000 toward the purchase of two new trucks, which should arrive soon. He also said that work on the Hwy. 91 project to relocate electricity lines for the building of the Northern Connector was moving forward well.
   The board also agreed to hire a representative from an outside consulting firm to collect data for a "big picture" of EES operations. Pat Hardy, an employee of the Municipal Technical Advisory Service connected with the University of Tennessee, said he looks forward to helping the EES board gain a better sense of where they are and where they are headed.