PUD commissioners vote unanimously to accept fiber grant

“We’re solvent. We’ll remain solvent, and we’ll enhance the quality of life in Chelan County.”

With those words, Chelan County PUD Commission President Dennis Bolz added his endorsement this morning to a resolution to accept a $25 million grant from the federal Rural Utilities Service (RUS) to help extend the PUD’s fiber-optics network to more remote areas of the county. All five commissioners voted in favor of the resolution, closely followed by a motion to begin the process of increasing PUD electric rates an estimated 2 to 4 percent to cover the financial gaps caused by extending the fiber build-out.

The financial concerns were raised because the grant also requires the PUD to cover 25 percent of the project costs for the build-out, estimated at about $8.3 million. But the PUD will also be responsible if there are cost overruns in completing the work within the three years allowed by the RUS terms and conditions. The build-out will extend service to an estimated 98 percent of the county.

In presenting his options to commissioners, PUD General Manager John Janney said he saw two alternatives if the PUD were to remain disciplined in its financial policies: 1) reject the grant and discontinue building the rest of the fiber system so expenses would be reduced; 2) accept the grant and set in motion the steps for an electric rate increase that would cover the financial shortfall.

Commissioners asked numerous questions about conditions in the grant before voicing their thoughts.

Commissioner Carnan Bergren moved to accept the grant. It was seconded by Commissioner Randy Smith, who began by thanking county residents for their active e-mails, phone calls, survey responses and full discussion of the pros and cons. The PUD did a scientific telephone poll last week to gauge community sentiment on the grant and potential rate increases of up to 3 percent. Results favored accepting the grant even with a rate increase.

The PUD also sent e-mails to more than 2,200 customers asking for their opinions, posted an online poll on its website, discussed the merits with community leaders, wrote a guest newspaper column and discussed the issue at regular board meetings and at a special meeting specifically for public comment on Tuesday night. Comments at that meeting were mostly against accepting the grant.

“We’re more than just electricity,” said Smith about comments from some that the PUD should focus more on its core business of providing electric service. He said there is a historic role for the PUD in serving the underserved. He doubted the wisdom of trying to sell the fiber system to another operator. “The people of Chelan County have been desperately asking for this for years,” he concluded.

Commissioner Bergren related a story of his youth working in the orchard with his father. When Bergren told his father that he only needed to pick the low-hanging fruit on the tree because it was easiest, his father made him finish the job. “I’ll hold the ladder,” his father told him at the time. “Now we have someone holding the ladder,” said Bergren, referring to the $25 million grant.

Commissioner Norm Gutzwiler said there is nothing free, including the federal grant. But he said he has faith the PUD staff can get the project finished as required. Responding to comments that some customers would now be subsidizing others, Gutzwiler said, “Every Tom, Dick and Harry out there that turns a light on is getting subsidized by someone else. It’s how we keep our rates low.” PUD surplus power sales help provide revenue to all PUD services, none of which cover their own costs.

Ann Congdon said the most compelling reason for her support of the grant is an ethical obligation. “We have to serve all our customers,” she said.

Bolz brought the board’s discussion to a close by referring to the PUD’s Mission Statement which includes the words, “to provide utility services that enhance the economy and quality of life in Chelan County.” He also referred to the new financial policies adopted by the board June 21 of this year and said, “It’s critical when you look your first tough financial decision in the eye that you don’t blink.”

Commissioners approved the motion to begin the rate-increase process. They will discuss details at their next regular meeting Sept. 7.