Co-op grilled on internet plans

A map showing territories of the various electric cooperatives in Virginia. Rappahannock Electric Cooperative serves the areas in light blue in the central and northwestern parts of the state.

Feeling the heat from constituents about broadband internet, the Louisa County Board of Supervisors this week pressured Rappahannock Electric Cooperative to commit to provide the service directly to customers.

In a hastily called public meeting with cooperative staff, the board also demanded to know whether Central Virginia Electric Cooperative can enter REC’s territory to be the broadband provider, if necessary.

Marc Seay, REC information technology manager, said the cooperative can’t commit to anything yet, but he suggested it will decide soon whether to enter the broadband business. REC leaders are considering applying this fall for $100 million from the Federal Communications Commission’s new Rural Digital Opportunity Fund. If successful, the cooperative would be committed to either provide internet service directly or as a partner with another entity.

Even if REC does dive into broadband service, the company serves members in 22 counties. Louisa County would not necessarily be the first to be served, and its low population density may put it at a disadvantage. The FCC grant funds could be spent over a 10-year period, a long time for Louisans to wait if they are last in line for service connections.

“It’s difficult to say when we would invest in [Louisa County],” Seay said. “Our goal would be to provide broadband to all of our members.”

Seay sent Louisa officials a letter in March asking them to say how much money they could commit to help REC provide broadband to its members. REC estimates it will cost $500 to $600 million to reach that goal. The supervisors did not respond with a specific dollar amount. At Tuesday’s meeting, Seay said whether Louisa and other localities agree to contribute is a factor in whether REC applies for the FCC funding.

The supervisors gave Central Virginia Electric Cooperative a $550,000 tax abatement in 2018, after the company announced a $110 million project to extend broadband to all of its members, including 3,500 in western Louisa County.

“They knew what we did for [Central Virginia Electric Cooperative], so that was on the table,” said Bob Babyok, the supervisors’ chairman and Green Springs District representative. “They asked us a question they already knew the answer to.”

REC has 12,790 meter connections in Louisa County, according to Ann Lewis, the cooperative’s director of community relations. The company’s service area includes much of the eastern and central parts of the county. Besides CVEC, Dominion Energy is the service provider in some areas.

Seay said he isn’t sure how much of the $500 million broadband investment would be made in Louisa County. 

If REC decides not to provide broadband directly to residents and businesses, another entity such as CVEC could install equipment on REC’s poles and be the service provider. The Virginia General Assembly passed a bill this year that eliminates the need to acquire separate easements to locate on a separate company’s poles. However, REC would still charge fees of $20 per year per pole, Seay said. 

Supervisor Toni Williams (Jackson District) asked if REC would reduce the fees to encourage another company to provide broadband within its territory. 

“I don’t know if that’s possible,” Seay said. “We take very seriously that our entire membership is kept whole.”

The supervisors asked if REC would apply for other large grants, such as the U.S. Department of Agriculture’s ReConnect program. CVEC received a $28 million grant and loan from that program in February after establishing Firefly as its broadband subsidiary.

The trouble for REC is that it has to be an established broadband provider first before it can qualify for the USDA grant, Seay said. 

“If we do that, we would need 80 to 90 new staff,” Seay said. “Until that decision is made, these [funding] sources don’t seem to be available,” he said.

REC conducted a feasibility study in 2018 and concluded that it could not afford to provide broadband directly. More recently, the cooperative decided to invest $30 million in a fiber utility network to improve communication among its electrical substations and radio towers. Orange County signed a deal with the company last winter to lease space on a portion of the network once it is constructed.

“I don’t think they feel the urgency,” said Jack Manzari, a Louisa resident who ran for a seat on the REC board in 2019, citing the company’s hesitancy to provide broadband to members as one of his issues.

“I’ve been sitting here for an hour trying to apply for the coronavirus farmers relief program,” he said. “It’s very slow.”

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