KCEC Seeks Modification Order at PRC

The regular monthly meeting of the Kit Carson Cooperative Board of Trustees takes place Tuesday, Oct. 25. Keep your hand on your wallet. As many of you readers know, KCEC received an order from the Public Regulation Commission to spin off the Broadband-Internet into a separate division within nine months.

Now, KCEC seeks “clarification” of that order due to its $60 million in loans and grants from the feds American Recovery and Reinvestment act. Basically, the Coop has, once again, used KCEC electric-side assets as collateral for the $20 million loan from Rural Utility Services (RUS) as part of the Obama energy package aimed at generating jobs and economic development in rural areas. KCEC has variously estimated the number of potential Broadband users at about 5,000. (In their recent filings, they said they had about 1600 Internet users.) Spend $60 million to hook-up an estimated 5,000 users and you come up with a cost of $12,000 per connection.

The KCEC projects sounds like a rural version of Solyndra II, the Obama ARRA solar disaster or Fisker I, the Finnish electric carmaker, subsidized by ARRA, which is coming under scrutiny. (Why are we subsidizing foreign enterprises? Oh, for the same reason we bailed out overseas banks.)

Anyway, KCEC, in their filing, says in paragraph 4 that “The requirement in the Commission’s Final Order for Kit Carson to spin-off or reorganize the internet/broadband business within a 9 month period could place Kit Carson in violation of applicable broadband grant regulations, as well as the broadband grant/loan agreements or other financing agreements currently in place with RUS, CoBank and other agencies if approvals have not yet been received in 9 months (my bold). Those regulations and agreements specifically provide that Kit Carson cannot unilaterally determine to move the broadband project into a separate entity and KCEC must obtain written approval from RUS to transfer Kit Carson’s Fiber-to-the-Home broadband project (“Broadband Project”) to another entity.”

KCEC has dangled Broadband contracts in front of local politicians at town hall to induce cooperation—successfully–in subsidizing the Command Center. Call the CEO at KCEC master of the double dip into the rate payer and tax payer pockets. These guys at the Coop are dangerous. They have lost $10 million while trying to compete for customers in side-divisions—Propane, Internet, and the Command Center (unnecessary). Now they want to compete with Taos Net and Century Link for Broadband customers. And all the Trustees are running for reelection on a platform of “borrow and spend” just like their brethren in Washington and on Wall Street.

Signed: The 99%.