THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Tuesday, April 30, 1996 TAG: 9604300437
SECTION: LOCAL PAGE: B1 EDITION: NORTH CAROLINA
SOURCE: BY LANE DEGREGORY, STAFF WRITER
DATELINE: BUXTON LENGTH: Short : 46 lines
After lengthy talks, two electric cooperatives that provide power to Hatteras and Ocracoke islands have decided not to merge under a single management structure.
In making the announcement Monday, officials said they would continue pursuing options to share data processing, computer, engineering, maintenance and inventory services.
``We're disappointed that there weren't additional savings that could be provided in a merger,'' Jim Sherfey, Cape Hatteras Electric Membership Co-op interim manager, said from his Buxton office.
``But we are exploring merging services with other eastern North Carolina co-ops. We're interested in doing anything we can to improve the cost of service and the reliability of providing power for our customers.''
Cape Hatteras Electric provides power for 5,200 homes and businesses on Hatteras Island. Tideland Electric Membership Corp., based in Pantego, provides electricity for 19,500 accounts in Hyde, Beaufort, Pamlico, Craven, Washington and Dare counties. Both businesses are nonprofit, member-owned utilities.
Tideland's board of directors voted not to pursue the merger after consultants completed a four-month study on the issue. The study, conducted by the accounting firm McGladrey and Pullen, cost $25,000. The two co-ops jointly financed the study, with Cape Hatteras customers paying about $10,000, Sherfey said.
According to the consultants' report, limited operational savings could be gained if the two co-ops merged. But resulting tax implications would not be in the best interest of electricity customers and owners.
``There are some tax advantages that Cape Hatteras Electric has that, if we merged, would no longer be available to us,'' said Sherfey. ``Our customers aren't charged sales tax, under a legislative act in 1965 that gave certain privileges to barrier island utility co-ops. Tideland members have to pay sales tax.''
Tideland's board of directors, however, said tax implications of a merger ``would not be in the best interest of Tideland EMC customer-members. by CNB