BEECHER FALLS, Vt. (AP) – Production is on the rise at the Ethan Allen plant, company officials told workers this week.

But employees are still concerned that a future plan to reduce energy costs at the plant remains uncertain.

The proposed project would use scrap lumber to generate electricity and heat, saving the company 20 percent in energy costs.

The plan requires a five-year commitment from Ethan Allen, but chairman and CEO M. Farooq Kathwari did not mention the project at a meeting Monday with workers, local lawmakers and state officials from Vermont and New Hampshire.

Rep. Bill Johnson, R-Canaan, who attended the meeting, said workers were “disappointed” the project was not brought up.

Plants in Beecher Falls and Orleans employ about 500 and 400 people, respectively, making Ethan Allen the Northeast Kingdom’s largest employer.

In 2002 the furniture maker closed its plants in Randolph and Island Pond. That same year Kathwari told Vermont officials that the business climate in the state needed to change. He gave the state one year to do something about high electricity costs, taxes and workers’ compensation rates.

Lawmakers made progress on workers’ compensation reform during the legislative session that ended last week, and the Vermont Electric Coop worked to come up with the plan to lower electric rates.

Gov. James Douglas, who also attended Monday’s meeting, left feeling optimistic about Ethan Allen’s future.

“The fact that we are beginning to address some of the competitive disadvantages … is certainly helpful,” Douglas said.

He said that the electricity project does not necessarily predict the future of the plant.

Sen. Vincent Illuzzi, R-Essex/Orleans, who also was at the meeting, expressed similar sentiment.

“I’m optimistic the company will stay,” he said.

At the meeting Kathwari told workers that new work is flowing into the Beecher Falls plant following the closure of Ethan Allen factories in Booneville, N.Y., and Virginia last month.

Work weeks have also expanded from 32 to 40 hours with no shutdowns in sight.

AP-ES-05-26-04 1321EDT