Chelan County PUD turns down broadband stimulus grant

The public utility district (PUD) of Chelan County, WA, became the second broadband stimulus award winner to decide not to go through with its funded project. Citing higher costs than originally envisioned and what the PUD termed “an unrealistic construction schedule,” Chelan County PUD commissioners April 11 decided not to use stimulus funds to expand its fiber to the home (FTTH).

In February, the State of Wisconsin became the first award winner to turn its back on a stimulus award, also due to cost concerns.

Chelan County PUD had received a $25 million grant from the Department of Agriculture/Rural Utilities Service Broadband Initiative Program (BIP) in the middle of last year. When the PUD submitted its proposal, it expected its share of the project would total approximately $8 million. However, at a commission meeting April 11, General Manager John Janney recommended that the PUD withdraw because PUD expenses could have risen as much as $34 million over its initial projections. The commissioners agreed unanimously with the recommendation. They also agreed to reduce PUD electrical bills by 2 percent. The PUD originally had planned to generate the matching funds the broadband stimulus award required through a similar increase in its customers’ electrical bills.

In addition to the potential cost overrun, the PUD determined that completing the work planned under the award would take twice as long as the three years mandated by the broadband stimulus program.

The PUD has yet to see any of the BIP funds, and does not expect to face penalties for withdrawing from the program.