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BrightRidge Adopts FY 2019 Budget with Minimal Increase to Cover TVA Rate Hike
JOHNSON CITY – BrightRidge board of directors adopted a $196 million operating budget Tuesday for the fiscal 2019 year, passing along the Tennessee Valley Authority’s 1.8 percent rate increase along with a rate policy adjustment designed to maintain BrightRidge’s operating margin. For an average residential customer, the rate increase will add about $3.25 to a monthly electric bill. “We believe this is a responsible budget that continues to reinvest in the electric distribution system, ensuring we continue to provide the highest possible level of service at the lowest possible cost,” BrightRidge CEO Jeff Dykes said. “We continue important improvements in the electric system, while moving forward with broadband internet, television and phone services that our customers continue to ask us for on a daily basis.” Overall, operating revenue is expected to increase by just .37 percent while expenses are expected to decline by 1.4 percent. About $600,000 in annual savings are realized through lower interest rates on the recently refunded debt formerly held by the City of Johnson City on the electric utility’s behalf. “I want to commend our staff for building a budget that maintains and improves the system while holding down costs to our customers,” Dykes said. “Most of our customers do not realize that we have been holding at bay as much as possible a significant increase in what BrightRidge pays for wholesale power. We actually went seven years without a rate increase at all, while TVA wholesale rates increased more than $50 million in the last 14 years.” About 75 cents of every dollar generated by BrightRidge operations goes to pay TVA for wholesale electric power. Continuing a trend seen through the TVA service area, electric sales are projected to continue to be flat as energy efficient products proliferate in customer homes and businesses. BrightRidge expects a net gain of about 500 customers, although kilowatt hour sales will remain flat. Net income is budgeted at $8.9 million. BrightRidge does not borrow money to cover maintenance and system capital improvements, instead paying these expenses from cash generated by operations. Capital reinvestment and renewals for FY 2019 are budget at $13.6 million. In addition, BrightRidge expects to make $5.8 million in tax payments to local governments, including Johnson City, Jonesborough and Kingsport as well as county governments in Washington and Sullivan counties. This sum is up from $5.4 million in FY 2018.