Alcoa nostalgia -- EES board considers effects

By Thomas Wilson
STAR STAFF
twilson@starhq.com

   Cold winters aren't just good business for ski lodges.
   Officials of the Elizabethton Electric System hope winter weather -- and new economic developments -- will offset potential revenue losses they face following the closure of Alcoa Extrusions earlier this year.
   "We've not really seen the result from Alcoa," Phil Isaacs, EES general manager told the system's board of directors at Tuesday's monthly meeting.
   Alcoa Extrusions closed its doors earlier this year, eliminating 240 jobs and a sizable corporate customer for the electric system. The plant's electric bill averaged $75,000 per month, according to the EES.
   "You are going to see a change in income," said Shirley Hughes regarding the company's departure.
   Alcoa purchased the facility in 1998 as part of the Alumax acquisition. The plant produced aluminum extrusion used in the automotive construction, distribution and industrial products markets.
   Isaacs acknowledged board chairman Gary Nave's observation that the system would need "1,000 new customers" to offset the revenue loss of Alcoa.
   "It will be an impact on us but there are two factors that can affect that," said Andie Talbert, EES finance director. "The weather, which we cannot predict, and that we may be getting new business into this area.
   "We've had a hot summer and a hot fall and that has boosted our revenue."
   The system's sales revenues were $2.79 million for September, with operating revenues hitting $2.86 million -- a net increase of 2.6 percent over September 2001 numbers, according to the monthly report presented to the board.
   Talbert explained that although the company had ceased operations, they were continuing to be billed.
   The company entered into a demand contract with Tennessee Valley Authority to purchase bulk amounts of electricity based on their demand each month, according to the EES.
   The contract stipulated that if Alcoa closed down, they would continue to pay an electric bill in an amount that reflected a percentage of their contractual demand.
   "We are still receiving revenue from them," said Talbert. "That will change in time."