LETTER: Mountain Parks Electric has things to consider as ISP
June 1, 2017
To the Mountain Parks Electric, Inc. (MPEI) Board of Directors:
I commend you for evaluating the possibility of providing broadband internet service. Consultants Power System Engineering had suggested a backbone fiber optic cable network in the MPEI Technology Work Plan completed in October 2011, but MPEI had them drop that because the estimated costs were more than 10 times that of the final proposed hybrid system. Unfortunately at that time most of the management staff and board at MPEI did not want to consider the possibility of providing broadband internet service, so the $300 thousand backbone was chosen to be deployed to meet MPEI communication needs. Now it appears you may invest in a $3.7 million fiber optic backbone communication system in order to provide broadband internet service.
If you proceed with this venture, please remember your fiduciary duty to the electric cooperative membership and charge 100 percent of this new investment to your broadband enterprise entity.
As a retired person on fixed income, I do not want my electric rates to pay any of the costs for a new broadband internet service. Subscribers to your internet service should pay the full cost for this system.
As the board of directors of an unregulated monopoly electric utility, you are not only responsible to authorize budget expenditures but also to approve electric rates without PUC oversight. I continue to urge you to contract with a qualified consultant to conduct an independent cost of service study in order to minimize subsidization of a few rate classes by the majority of ratepayers.
Also please consider the fairest basis for rate design for a cooperative, equal rate of contribution to margins (rather than rate of return on investment as conventionally done for investor owned utilities).
Good luck on your new venture.
Les Shankland, P.E.
Retired MPEI Manager of Engineering