Fiber rate increase passes

Commissioners looking at ways to collect bills that are past due

Grant County PUD commissioners approved a rate increase for fiber service providers Monday afternoon, but not everyone was happy with all the terms of the plan.

The new rate structure means providers will be charged an additional $7.50 per Internet subscriber. The rate per video and telephone customer will remain at $5, though that charge will no longer be bundled with Internet service.

Steve Frazier, who works as a consultant for the service provider Net Plus, told commissioners that the PUD should be more aggressive in going after the fees owed by its service providers.

Frazier said he feared these providers were using the PUD to bankroll their business. He asked commissioners to pass a resolution to get the unpaid accounts under control, even if it means unplugging the service to those providers.

"They've had a long time to pay. They've chosen not to, and you've chosen not to make them," he said.

As of May 2004, service providers owed the PUD $217,102.28 in late fees, according to a PUD telecommunications financial report. The two largest late payers are Donobi and VIB, who are the only two providers to offer video service on the Zipp network.

VIB owes $35,951.97, and Donobi owes $91,190.97, according to the May statement.

Commissioner Randy Allred said he was also unhappy that no cut-off date was included for providers who are behind on their bills. Delinquent electrical customers would see their power turned off, and Allred said he thinks a similar option should be available for fiber service providers.

Included in the new rate plan is a .5 percent finance charge for late payments, which Allred said needs to be harsher to encourage providers to pay their bills.

Eric Briggs, an employee in the PUD's fiber department, said after the meeting that four providers, including VIB and Donobi, have set up payment plans, and both those companies are current on their payments of those plans.

The payment plans were developed when the PUD had problems with its video feed last year, causing its video providers to lose business, Briggs said.

PUD Attorney Ray Foianini, at the direction of the commission, said he would research the legality of a resolution allowing the PUD to turn off service to providers who have not paid their bills.

On July 1, the fiber network's new customer-service plan went into effect, which assigns penalties based on a point system similar to credit ratings. That plan allows for the shutting off of service after a

provider falls under a certain number of points.

The plan is based on the electrical-system plan, Telecommunications Director Larry Jones said.

In an e-mail response to the Herald, Melissa Tippets, operations manager for Donobi, said her company has entered into a payment plan with the PUD and is currently $80,000 past due.

However, Tippets added that 17 of the PUD's 28 service providers on the Zipp network will have financial difficulties once the PUD's new customer-service policy is enacted.

"The fact that so many fiber service providers are struggling with delinquent payments to the PUD, including the two largest which service 80 percent of the customer base, suggests a larger issue," Tippets wrote.

Donobi is currently $80,000 behind on its payments, Tippets added.

Kelly Ryan, who owns VIB, was out of the state and did not respond to an e-mail response for comment.

In other PUD news, Steve Beckett, a former employee and current service provider, presented commissioners with a draft copy of a 2003 state auditor's report criticizing the PUD's public-records policy.

The draft, which was not included in the final 2003 report that criticized the district for misspending more than $1 million in illegal contracts related to the fiber system, states that PUD management did not fully intend to cooperate with public-records requests in 2002 and 2003.

"The PUD's intent was to 'hide' public information," the report stated.

Beckett sued the PUD last year, claiming he did not receive his requests for public documents in a timely fashion. The suit is still pending.

Mindy Chambers, spokeswoman for Auditor Brian Sonntag's office, told the Herald that the finding was included in a management letter sent to the PUD. Auditors will often adjust their findings as they receive more information, she said.

PUD Auditor Kim Justice has taken over the duties of public-records requests this year, and Beckett said the system has approved in that time.

"I've noticed a very big change since she's been involved in it," Beckett said.