PUD fiber alternatives to be aired

EPHRATA — Grant County PUD customers support the idea of expanding the PUD fiber network, but don't support a surcharge on electric rates to pay for it. That was the conclusion of a survey conducted among PUD customers and reviewed with utility district commissioners Tuesday.

The PUD has been building and operating a fiber network for more than a decade. Commissioner Tom Flint has been on the commission since the inception of the fiber program. “There is some consistency, at least from my perspective,” he said. “People still want it. It's our job to figure out how to pay for it.”

But that, said commissioner Bob Bernd, is the challenge. Bernd has been on the commission for 10 years, he said, and production costs were much lower when he started. “Meanwhile, the price of energy out in the market is about the same as what our production costs are.” That makes a difference in the way the PUD can approach a project like finishing the fiber buildout, he said.

“We're seeing continued pressure on the wholesale market,” said Dave Churchman of the PUD's accounting department. At the same time, the PUD is about halfway through a two-decade project to upgrade Wanapum and Priest Rapids dams, along with continuing upgrades to the distribution system. Chief executive officer Kevin Nordt said that work will cost the PUD at least a billion dollars.

The current fiber system reaches about 70 percent of the customer base. Utility district commissioners have been reviewing the fiber program for about six months. That review determined the PUD doesn't have enough money to complete the buildout without an increase or surcharge in electrical rates.

Munro said the residential customer surveys showed most respondents were in favor of expanding the network, “but when costs, such as an electric rate surcharge, are considered that support drops pretty significantly.”

A surcharge, or the option of a long-term contract, didn't have support among people who don't have fiber, Munro said. The levels of support remained consistent even when people factored in the idea that customers who don't have fiber access helped pay for people who do have it.

Industrial customers make up about 44 percent of the PUD's retail electric revenue. “All of those customers are different,” Churchman said, with differing views about expanding the fiber network. “But the one thing that's consistent between all the customer classes is they're all in extremely competitive environments.” Many of those customers came to Grant County due to the low electrical costs, and they expressed concern over cost increases.

The survey team made some recommendations to be considered by the commissioners. The option of expansion should be kept open, but “we should be cautious before committing additional capital,” Munro said. The network could be expanded for customers who can pay the costs, the report said. Installation cost varies depending on the conditions, but the estimate from PUD officials was about $16,000 per mile.

There is an opportunity to increase utilization among customers who have access to fiber already, and the PUD should work on that, Munro said. The report also suggested the PUD pursue federal and state assistance to help pay the costs of completing the system.

Cheryl Schweizer can be reached via email at education@columbiabasinherald.com.