EES lacks buyers   

By Thomas Wilson
star staff
twilson@starhq.com

  The Elizabethton Electric System has power to sell - the trouble is finding buyers.
  "We have the infrastructure to sell five million dollars in electricity if we had the customer base," said EES board of directors chairman Gary Nave at the board's meeting on Tuesday. "Shouldn't we be doing more to try to recruit customers?"
  While EES revenues from electricity sales exceeded $2.6 million for June - a 16 percent increase over June 2003 numbers - actual kilowatt hours of electricity sales are down.
  "We are buying more and selling less," said Andi Talbert, EES director of finance, who presented the June financial report to the board.
  The Tennessee Valley Authority's board of directors voted last year to pass a rate hike to municipal power providers who in turn passed their power costs on to consumers. The cost of power purchased by EES from TVA in June hit $2.2 million representing a 27 percent jump from the system's June 2003 power bill, according to the system's monthly report.
  The system's power sales bottom line has taken a hit in recent years from the loss of local industries that bought copious amounts of electricity. Alcoa Extrusions, which closed more than two years ago, represented the system's large electricity customer with average power sales exceeding $200,000. While the loss of Inland Paperboard and Packaging plant on West Elk Avenue and Frank Schaffer Publications did not come near that dollar amount, they did represent lost electrical sales to corporate citizens.
  June operating expenses of roughly $2.9 million exceeded operating revenue of $2.7 million by roughly $183,000 with a portion of that coming from "line loss", which refers to estimates of electricity lost in delivery across the system's infrastructure.
  Trees, weather, or other external forces affect electricity sent over the system's power grid resulting in the line loss phenomenon. EES general manager Phil Isaacs said that as the EES infrastructure expands, the system expects line loss to expand as well.
  "As our system grows that means more and more wire out there and that constitutes some resistance," he told board members. Isaacs said the system was implementing plans to reduce loss and is working with TVA officials to evaluate future lines losses.
  The board approved the monthly reports by a 3-0 vote. Janie McKinney and Shirley Hughes did not attend the meeting.
  In other business, the board also voted 3-0 to write off more than 1,100 accounts representing $173,000 in bad debt owed to the system from unpaid power bills. Talbert said the amount was a considerable increase over previous years when debt write-offs averaged around $100,000.
  Isaacs and Talbert said each overdue bill listed in the write-off had been turned over to a collection agency. During the 2004 fiscal year, the system did manage to collect $21,000 in bad debt, Isaacs added.
  Board members present also agreed to amend the board's charter stating any official action taken by the board required a majority of the board's full membership.
   Nave cited a decision by the Elizabethton Board of Education to bring a resolution back for a second vote at its July meeting after board members voted 2-1 on the issue in June. The 2-1 vote was illegal according to state law that requires a majority vote of a school board's entire membership and not merely a quorum of board members present at a meeting.
  EES counsel John Banks said that while no state law existed requiring a similar majority vote for the EES power board the decision to was a "good idea" given potential legal ramifications.
  "The legislature passed a statute saying it has to be that way for school boards," Banks told board members. "I think we are probably going to have it raised to boards like ours."
  Nave, Ken Wandell, and Jim Jones voted to draft a resolution making a majority vote a requirement for the board.
  The board will hold a budget workshop on Aug. 3 to discuss the system's fiscal year 2005 budget.