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Chelan County PUD proposes to Cap Cost of New Fiber Network Connections

March 22, 2011

No more free ride . . .That is essentially the message being conveyed by Chelan County PUD to Wenatchee area fiber customers. In an effort to rein in expenses the PUD is planning to impose a cap on the cost of extending fiber service to homes and businesses. Steve Hair reports . . .

If adopted, the proposed change in policy would establish a 15-hundred dollar cap on the District’s share of the costs of hooking up . End users would have to cover anything over and above that. PUD General Manager John Janney told Commissioners at their Monday meeting that the networks program is losing about 8 million dollars a year and, Without the changes, he says it’s doomed as a business model

A long term strategic plan on the fiber program continues. Officials have been reassessing the fiber program’s finances after two of its former managers were fired last month for failing to provide accurate cost estimates relating to the network build-out.

The build-out continues through a federally funded 25 million dollar grant which electric customers match with a 2 percent rate increase. But Commissioner Dennis Bolz wonders if accepting the grant was a mistake. He and Commissioner Carnan Bergren expressed concerns that prior to accepting the Federal grant there had not been any estimates of costs relating to the replacement of power poles when extending fiber service through overhead utilities
Meanwhile, the scrutiny over the fiber program finances intensifies. 10 years into the build-out there’s increasing concern about looming costs of upgrading outdated or obsolete equipment. The PUD has to date invested 110 million dollars into the networks program with nothing but red ink to show for it.

For their part, Local Internet Service providers say they continue to sign up new customers. But Demetri Mandelas with LocalTel is worried that under the proposed policy change residential users facing additional hookup charges Will likely opt for a cheaper option. . ..

Commissioners will take final action on the plan at their Monday afternoon meeting next week.


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