Firms Cut Back Production; Barges Halt; Utility Costs Rise : Drought in South Striking at Industry

The devastating Southern drought that has already cost farmers from Alabama to Virginia more than $2 billion in crop and livestock losses is now threatening to exact its toll in other parts of the economy as well. Food processing plants, utility companies, barge owners and tourist attractions are beginning to feel the crunch.

Here in drought-stricken Ellijay--whose name, ironically, comes from the Indian for “Land of Many Waters”--Mayor David Westmoreland says: “We’re preparing for the worst.”

This mountain town of 1,750 in northern Georgia, 70 miles due north of Atlanta, is already on the state’s list of more than 100 endangered communities. If things don’t improve, the town’s largest employer, Gold Kist Poultry, with 350 workers, is faced with either cutting back production or paying significantly higher rates for the water it needs.

Fears Critical Situation

Another major water-using employer in the town, the Courier carpet-dyeing plant, may face the same choice.

“If conditions continue for the next 60 days like they have for the past 60, our situation would become critical,” the mayor says.

Already the town has been forced to erect a 70-foot riprap dam of small boulders across the Ellijay River in order to raise the water level high enough to reach the intake pumps for one of the town’s two water treatment plants.

City officials have also imposed stringent water conservation methods, including a ban on outdoor watering, car washing, hosing down sidewalks and filling swimming pools. The only commercial car wash in town has been forced to cut back its operations to Saturdays and Sundays.

Explains Water Source

“We Irigate With Creek Water,” says the slightly misspelled sign in front of Louise’s Nursery and Laundromat. The owners, Jimmy and Louise Miller, say they were forced to put it up in self-defense. Townspeople driving by saw the green plants outside the store and accused the Millers of violating the ban on outdoor watering.

“We have been fussed at, cussed at, laid down and all but stomped on,” Miller said. “We felt it was necessary to tell people that we irrigate with our own pump from the creek right below the store there, so we’re not using city water.”

All across the South, the drought is taking the bloom off the Sun Belt’s economic resurgence.

“There’s a faction in this town that doesn’t want you to paint the real situation--like in ‘Jaws’ when the shark hit the beach,” the mayor said. “They’re afraid telling the truth might scare away businesses that are thinking about moving here.”

Industries Get Notice

In Monroe, N.C., a community of 12,640 southeast of Charlotte, city officials have already asked the three major water-consuming industries to cut their use by 15%. Among those firms is a Holly Farms poultry plant that normally processes more than 100,000 chickens and uses up to 800,000 gallons of water each day.

“We’re just going to decrease our output in Monroe and process them at one of our other plants,” said Holly Farms President Kenneth May. “It’s nothing really dramatic with us because we’re just shifting production around.”

Last week, the Army Corps of Engineers said that barge traffic on the Chattahoochee River in Georgia and Alabama would be halted because the drought had lowered water levels to the point where fully loaded barges can no longer make the trip.

“It’s like being a kid and losing your favorite toy,” Arthur (Pete) Henries, skipper of the towboat Lisa C., said recently as he made what was probably his last trip of the year along the waterway. “I’ve been coming up here so long and for so often that this river is my home.”

Electricity Costs Rise

In Knoxville, Tenn., officials of the Tennessee Valley Authority said the drought has cut production at the utility’s string of hydroelectric dams by half, forcing the expenditure of more than $100 million to offset the loss through greater use of its coal-burning plants and the purchase of electricity from utilities in the Carolinas and the Midwest.

The Southeastern Power Administration in Elberton, Ga., faces a similar rise in costs as the Corps of Engineers takes steps to reduce power at three hydroelectric dams along the Savannah River from which the utility gets electricity.

James Parker, a spokesman for the corps’ district office in Savannah, said the decision to cut back on hydroelectric generation was prompted by what corps officials deemed the more important job of maintaining an adequate flow of water in the Savannah River for industries in the Augusta area.

“We couldn’t have it both ways,” Parker said. “And there are a number of water-intensive industries in the Augusta area that need to draw off the river, including a Procter & Gamble plant, a Kimberly-Clark paper products operation and a U.S. Department of Energy facility for processing weapons-grade plutonium.”

Possible Grinch Christmas

Christmas tree growers also are beginning to feel the pinch. “I’ve lost a year, is what it amounts to,” said Bob Williams, owner of Salacoa Valley Christmas Trees in the north Georgia community of Walkesa, as he pointed to a field of 6-year-old Virginia pines whose growth has been stunted by the dry weather.

“These trees were sheared once in the early spring--shaped up so they’d bud out and be fuller--and around the first of August we’d usually shear them again,” he said. “But as you can see, there’s nothing much to shear.”

Williams added that the prolonged dry spell has devastated the 5,000 pine seedlings he set out earlier this year, killing about half of the young plants.

Grant Goodge, a climatologist with the National Climatic Data Center in Asheville, N.C., estimates that it would take at least six straight months of above-average rainfall to restore normal conditions in the hardest-hit drought area, which extends roughly from eastern Alabama, across Georgia and the Carolinas and into the Piedmont section of southern Virginia.

Calls Recovery Chances Dim

“Based on our previous 95 years of information for the worst-hit area, the likelihood of returning to normal conditions in the next six months is one in 50,” Goodge said. “The chances of it happening in a shorter period--say the next three months--are even higher. Fall is usually the driest time of the year, making it the worst time to try to get out of a drought.”

David Ashley, water resources manager for the Georgia state Environmental Protection Division, said that his agency is now operating under the assumption that the drought will continue through at least next summer.

“We have already notified over 100 communities in the state, mainly those in the northern part that depend heavily on surface water systems, to implement some kind of water-use restrictions,” he said.

Forecasts Stay Pessimistic

Ellijay is one of those communities. But even with the conservation measures, the town’s water supply remains troubled. Water levels at both the Ellijay and Cartercay rivers--the town’s two sources of water--continue to dip, and weather forecasts remain pessimistic in both the short and long term.

City officials say the next step in Ellijay’s battle plan is either a temporary hike in water rates to discourage demand or a reduction in the amount of water local businesses and industries can use.

Researcher Diana Rector contributed to this report.