Chelan PUD backs off broadband expansion

A central Washington utility district is saying “no thanks” to nearly $25 million from the federal government to help extend its broadband system.

The Chelan County Public Utility District asked for the money last year, but is turning it down now because the project could cost the PUD about $42 million, more than five times greater than originally thought.

The U.S. Department of Agriculture notified the state Monday that it was rescinding its offer of $24.9 million in stimulus funds from a program designed to expand rural access to the Internet. The Chelan PUD board voted last month to withdraw from the program.

The district has broadband lines along with power lines available to about 70 percent of its customers and was looking to extend the service. Last year, when the Recovery Act money became available, the PUD board got preliminary figures that suggested it could complete the project for about $33 million – $25 million from the USDA and $8 million of its own money.

But later studies showed the cost could be as high as $67 million, PUD spokesman Steve Lachowicz said, and the district would be on the hook for everything over $25 million. Part of the cost comes from having to replace many of the poles that would get new broadband lines, or burying cables in rugged terrain in parts of the county, he said. Because much of that land is owned by government agencies, the district would also need to go through lengthy permit processes, and might not be able to finish the project in three years as required by the terms of the federal program.

To pay for the district’s share of the new estimates, rates would have gone up higher than customers said they would support, Lachowicz added.

The USDA said the $25 million was being returned to the U.S. Treasury.