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Johnson City Power Board mulls whether to offer internet, phone services

Jeff Keeling • Aug 26, 2009 at 12:00 AM

JOHNSON CITY — To get into the telecommunications business or not to get into the telecommunications business — the Johnson City Power Board is getting closer to answering that question in earnest.

Whether the JCPB joins area utilities Bristol Tennessee Essential Services and the Bristol Virginia Utilities Board in offering Internet, phone and television to its 75,000 electricity customers will have a lot to do with the economy, JCPB General Manager Homer G’Fellers said Tuesday.

“It’s one thing to do a cost of service and structure rates (for those services), but if you don’t have the ability to look at what things will impact you in the next few years (it’s difficult to make a decision),” G’Fellers told the board.

The JCPB already is moving forward with a project that will connect all of its 29 substations with fiber-optic cable. That move should greatly improve the system’s overall reliability by bettering communication between those substations and decreasing system outages.

Installation of “advanced meters” and the substation connections are part of bringing “smart grid” technology to the JCPB that will allow customers to use power more efficiently and the JCPB to structure rates in a way that benefits more efficient use.

What the substation work won’t do, however, is pay for itself, and the JCPB cannot adjust rates to subsidize it. Numerous power distributors that have made the transition to fiber-optic cable have extended that cable into customer neighborhoods and offered fee-based services that compete with local television, Internet and telephone providers.

The JCPB has hired a consultant to study economic feasibility of offering such services, look into grant possibilities, and forecast how all that will mesh with pending changes in the electrical industry. Because the JCPB is definitely going to connect its substations with fiber and start within weeks — and because grant deadlines for funds that could help pay the cost are fast approaching — G’Fellers needed guidance, he told the board.

“We’re having to make some decisions now to where we probably need to know where we’re definitively headed,” G’Fellers said.

More than a year has passed since a consultant’s study outlined options for fiber-optic cable, including running “fiber to the home” at a cost of up to $130 million.

G’Fellers said federal stimulus grants well in excess of $20 million are available for “shovel-ready” broadband projects. Money is also available in smaller amounts for “smart grid” technology. The substation connections (called a “fiber backbone”) and pending installation of an “advanced metering” system — collectively expected to cost about $20 million — could both qualify under the smart grid grant program.

“If there’s money available, we ought to at least request it,” board member Joe Grandy said. “If we’re able to get a grant for $50 million by matching it with $50 million, that changes the business case for offering these services.”

G’Fellers warned that not many grants are being awarded to municipal broadband providers, but he said it wouldn’t hurt to try. Even if the JCPB qualified for a grant, he said, it could back out if the numbers didn’t make sense economically.

G’Fellers also said at the very least the JCPB should reach out to large area businesses and offer the possibility of fiber-optic services — which have the fastest data transmission speeds of any type of cable — to those customers.

Crews will start connecting JCPB substations with fiber-optic cable within weeks, and the JCPB’s Mark Eades said that process should take only about four months. In the meantime, the JCPB’s board will continue studying the various costs associated with extending that fiber to business and residential customers.

Bristol Tennessee Essential Services’ Web site touts the speed of its “fiber to the user” network as an economic development tool. Fiber connections have the possibility of much faster speeds than traditional methods, particularly in the realm of “upload” speeds for transmitting data from the user’s computer to other computers.

BTES mentions the possibility of video conferencing, telecommuting, medical consults, research, business incubation and distance education among the benefits of fiber’s high data capacity.

Board members should hear updated cost figures at their September meeting.

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