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Vermont Takes Close Look at Electric Utility Broadband Feasibility

Randy Sukow / Jan 7, 2020

Electric utilities in the Vermont could potentially be the providers of fiber service to many of the state’s more than 80,000 remaining homes and businesses unserved and underserved by broadband, according to a report by the Department of Public Services (DPS). However, the 200-page “Feasibility Study of Electric Companies Offering Broadband in Vermont,” estimates capital costs of $248 million and finds that utilities may not be able to reach all unserved homes.

“The report concludes that while it is possible for many of Vermont’s utilities to develop retail, fiber-to-the-home broadband offerings, such a move would expose them and their ratepayers to substantial financial risk,” said DPS Commissioner June Tierney in a letter to the Vermont legislature accompanying the report. “Nevertheless, distribution utilities can play a significant role in the provision of broadband through shared access to broadband capable facilities, such as middle- and last-mile fiber deployed for Supervisory Control and Data Acquisition systems and smart meters.”

Unlike states in many other parts of the country, the Vermont study expresses confidence in the accuracy of its broadband maps and its count of 80,802 unserved/underserved locations. (Pictured, for example, is DPS map of Vermont Electric Cooperative’s service area shaded in green.)  According to a financial analysis DPS completed in cooperation with consulting firm Magellan Advisors, that would come to an average cost of $3,355 per home passed.

The feasibility of broadband projects depends in part on the type of utility making the investment. The state’s 14 municipal utilities have varying financial outlooks, but “tend to have good debt ratios,” the report says. However, municipals are not eligible for loans from USDA’s Rural Utilities Service (RUS), while the states two cooperatives (Vermont EC and Washington EC) and one investor-owned utility (Green Mountain Power) are.

“It will be necessary for each electric company to make its own assessment and analysis of needs, prospects, costs and any other issues to reach conclusions.  There is not a ‘one-size-fits-all’ solution to extending internet services to Vermont’s unserved areas,” the report concludes. NRTC Broadband Solutions can provide such individualized feasibility studies in Vermont and every state in the union. Its feasibility studies are highly respected throughout the broadband industry.

NRTC also can help members seeking RUS and other forms of broadband funding. In Vermont, the state released its new study concurrently with opening a new phase in its broadband grant program, which will be limited to electric distribution utility applicants. Interested utilities must submit a Notice of Intent by Feb. 3 and a grant proposal by March 9.

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