Officials with Kenergy Corp. and Big Rivers Electric Corp. told lawmakers Thursday Kenergy intends to move ahead on plans to create a regional broadband Internet service in Kentucky through a subsidiary.
(TNS) — Officials with Kenergy Corp. and Big Rivers Electric Corp. told lawmakers Thursday Kenergy plans to move ahead on plans to create a regional broadband Internet service in Kentucky through a subsidiary.
But first, Kenergy must receive a waiver from state law preventing regulated utilities from using their assets to secure loans for non-regulated activities, such as broadband internet. If Kenergy does not receive the waiver, the company may need legislative support on a bill to move the project forward, company officials said.
Representatives from Kenergy and Big Rivers spoke to the interim committee on tourism, small business and information technology about the proposed $165.9 million broadband project. Kenergy is one of three energy cooperatives that owns Big Rivers.
Kenegy CEO Jeff Hohn said the study found “there is a large gap in western Kentucky where broadband is available.”
Kenergy would own the fiber cable, but operations of the broadband service would be provided by Kenect, a Kenergy subsidiary. Leslye Krampe, Kenergy’s commercial accounts and economic development specialist, said almost none of most of the utility’s 14-county service area is connected to high-speed fiber. Much of the region uses slower forms of internet, such as satellite, DSL and dialup.
“We are severely underserved with broadband,” Krampe said. In the Owensboro area, only Owensboro Municipal Utilities provide fiber broadband connections, according to document Kenergy provided the committee.
When asked if Kenect would “cherry pick” areas where it expanded broadband, Hohn said, “Our intent is not to cherry pick; it’s to serve everyone we go past.”
Reaching everyone would take time, Hohn said. The plan calls for the system to be built over six years.
Officials could not discuss how much the service would cost, Krampe said, because the company is currently trying to secure federal funding. Krampe said the cost estimates exist, and called the cost “fair and reasonable.”
A subsidiary must operate the broadband service. The subsidiary will not be regulated by the Public Service Commission, as Kenergy is.
That division is necessary “so the regulated customer does not subsidize the non-regulated entity,” said Sharla Wells, Kenergy’s director of legislative affairs and government relations.
Daviess County has the most customers in Kenegy’s service area. Last week, Daviess Judge-Executive said he was not in support of the Kenergy receiving the waiver to use utility assets to secure loans for the project.
Mattingly said he was concerned that energy customer rates could be affected by Kenergy subsidizing Kentect, and about whether broadband service would be available to everyone.
Wells said, the utility does not get the waiver, “it will be up to the legislative body to make this happen.”
“The pandemic has really manifested the need for rural connectivity,” Wells said. If the project receives the waiver, the plan is “a shovel-ready project” for the region, Wells said.
©2020 the Messenger-Inquirer (Owensboro, Ky.). Distributed by Tribune Content Agency, LLC.
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