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FEATURE: Part 2 – The Perspective of Georgia’s EMC’s as First Company Files Broadband Docs with Public Service Commission

By Lou Phelps, SBJ

March 26, 2020 - In a press release several weeks ago, The Georgia Electric Cooperative (Georgia EMC) penned a report regarding the filing of documents by Diverse Power Inc. and its internet affiliate Kudzu Networks Inc. with the Georgia Public Service Commission. in conjunction with the company’s purchase of South Georgia Regional Information Technology Authority (SGRITA), a company providing internet service to rural areas in Southwest Georgia.

Georgia EMC is the statewide trade association representing the state’s 41 electric cooperatives, Oglethorpe Power Corp., Georgia Transmission Corp. and Georgia System Operations Corp. Collectively, Georgia’s customer-owned co-ops provide electricity and related services to 4.4 million people, nearly half of Georgia’s population, across 73 percent of the state’s land area.

With the push to expand rural broadband across Georgia, such transactions are in works, as is legislation in both the Georgia House and Senate to set rates and address other issues.

“Internet access is no longer a ‘want’ but rather a ‘need’,” says Diverse Power President/CEO Wayne Livingston.

“Our board of directors, who live and work in rural communities, thought it important enough to step-up and play a role in providing what is becoming an essential service for our members and communities to remain competitive and vital in the 21st century.”

SGRITA began soliciting bids in third quarter 2019 for the sale of its assets, including more than 600 customers in Early, Miller, Baker, Calhoun and Mitchell counties. Diverse Power Inc. was the only bidder - among 16 eligible contenders - to respond to SGRITA’s request for proposal.

On April 26, 2019, Gov. Brian Kemp signed Senate Bill 2, legislation passed by the Georgia General Assembly, which allows electric membership corporations such as Diverse Power Inc. to provide broadband services or leverage EMC infrastructure in other ways to aid deployment of broadband. But, Rep. Ron Stephens of Savannah, has filed a bill that passed the Georgia House last week that attempts to address the rates that the EMC’s can charge to use their poles.  (See related article, "FEATURE:  Part 1 - Georgia Homes and Business Stand to Benefit by Georgia Broadband Opportunity Bill, States Rep. Stephens." published March 25, 2020.)

In the Coastal Georgia area, association member Canoochee EMC serves portions of Bryan, Candler, Chatham, Emanuel, Evans, Liberty, Long, Tattnall and Toombs counties.

As required in SB 2, Kudzu Networks Inc. will maintain separate books of accounts and records subject to inspection and compliance as required by Georgia Law. The cost of forming the broadband affiliate will not be borne by Diverse Power Inc. ratepayers.

These requirements, as outlined in SB 2, ensure that cross-subsidizations do not occur between the electric activities of Diverse Power Inc. or any other electric cooperative and any associated broadband activities.

Removing barriers for the expansion of broadband to rural Georgia has been a top priority for state lawmakers, according to the association of EMC’s, recognizing that a lack of high-speed internet prohibits quality education, economic development, telemedicine and improved quality of life for many Georgians. “Without access, new and growing businesses, entrepreneurs and others are likely to flee areas that lack broadband, putting rural Georgia at risk

“We want to thank legislators for their leadership and support of Senate Bill 2 in the last legislative session,” notes Livingston. “If not for passage of SB 2, Diverse Power could not have submitted a bid for SGRITA to become a dependable and reliable provider of high-speed internet in rural Southwest Georgia.”

In addition to Diverse Power’s acquisition of SGRITA, other EMCs in Georgia are actively searching for solutions to the broadband dilemma, including partnering with other entities (i.e. – any willing cable operator and/or other entities) and seeking available funding for deployment.

The association’s position is that following passage of SB 2 in April 2019, EMCs have taken significant actions. Among them:

- EMCs led or supported three of seven applications in the first round of USDA’s ReConnect Program for rural broadband in Georgia.

- EMCs initiated or are evaluating feasibility studies and/or conducting member surveys or other ways to advance broadband deployment.

- EMCs are reviewing and assessing business and financial models to determine if it’s economically viable to enter the broadband space.

- EMCs continue leading discussions with potential partners and other 3rd party providers across the state. For example, Jefferson Energy in Wrens and Sumter EMC in Americus have formed partnerships with Pineland Telephone Co-op to provide improved broadband access to areas that are underserved through a fiber-swap arrangement.

Habersham EMC in Clarkesville and Blue Ridge Mountain EMC in Young Harris have been pioneers in the delivery of broadband to rural areas. Blue Ridge Mountain EMC currently serves 8,700 broadband consumers and recently announced plans to add approximately 15-20 percent in 2020. Habersham EMC expects to increase broadband deployment 20 percent by year-end with a goal of increasing subscriber count (approximately 4,900 currently) 100 percent by 2023.

Altamaha EMC in Lyons, and at least one other EMC as a principal partner with an applicant, will be submitting a second application prior to the March 16 deadline in USDA’s Reconnect Program.

According to Livingston, through these tangible efforts, EMCs are helping to move the needle in bringing broadband to underserved and unserved areas. The endeavor is made especially challenging due to the number one barrier of broadband deployment: the high cost of extending facilities into rural areas with low customer density.

For EMCs, the statewide average electric customers per mile is less than 11, far below the 20-plus customers-per-mile generally necessary for existing communications service providers to produce a return on their investment in broadband deployment, the association states.

Diverse Power Inc. is a member-owned electric cooperative that provides reliable electric energy-related services to the Georgia Counties – Troup, Harris, Heard, Meriwether, Muscogee, Coweta, Quitman, Randolph, Clay, Calhoun and parts of Early, Stewart, and Terrell. As well as Chambers County, Alabama, formed by farmers and rural businessmen in 1936 to bring electricity to the rural countryside, which was considered an innovative idea at the time.

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