Chelan PUD Considering Next Step With Internet Fiber Network

Chelan PUD is considering its next step after financing for the current expansion of its internet fiber network expires in 2026. 

The network is projected to reach 85 percent of the PUD's customer base by that time using half of its distribution system. 

Chelan PUD Senior Project Manager Toby Tarzwell told PUD board members at their Monday meeting that those numbers reveal the challenges ahead to reach the remaining customers. 

"The remaining half of our distribution system is going to be needed to reach that final 15 percent," said Tarzwell. "So, that really does highlight the challenge of how remote these areas are, how low density these areas are, and how much make ready work was involved to get there." 

About 42,000 homes and businesses are projected to have access to the fiber network by the end of 2026, which will leave 6,000-7,000 in the balance. 

The fiber network is on the same distribution system through which PUD electricity reaches customer homes and businesses - neighborhood utility poles. 

Those poles often have to be replaced to meet regulatory standards before the PUD can extend fiber cable into an area. 

The cost for making those upgrades can be impacted by the availability of contractors, property easements, topographical features, permitting, and supply chain issues. 

Cost spikes can delay or stop expansion work altogether. 

The PUD is also considering whether it makes sense to add fiber cable to power poles, which on average are 30 years old in remote areas, when the poles will need to be replaced in 5-10 years. 

The cost to extend the fiber network to the final unserved 15 percent of customers who are located in the most remote, sparsely populated areas of the county is especially high. 

Rough PUD estimated peg that cost at between $15,000 and $25,000 per building, or premises. 

Tarzwell says the total cost would be quite high. "You can do the math and depending on how many premises we decide to expand to, the overall project could be in the $100 million to $150 million range," Tarzwell said. 

PUD board members are being asked to consider what the long-term plan should be for unserved areas and infill, which are pockets within the established service area that don’t have access to broadband. 

There's also the question of whether there are other technologies or grants that could bring high-speed internet to hard-to-reach areas. 

PUD staff now plan to develop maps of unserved and underserved areas in Chelan County. It will also draw up plans for select expansion of the fiber network. Staff is advising against expansion to Stevens Pass or Stehekin because of the far off remote location those areas.

The PUD offers access to its fiber network on the wholesale market. Internet service providers such as LocalTel pay to use the network to offer internet access to retail customers. 

The network currently reaches 39,000 customers, of which 21,000 are taking service on the retail level.  

According to the PUD, the wholesale network is currently not financially self-sustaining. 

Chelan PUD began the fiber buildout in 2001. 

Funding for the fiber network expansion comes through the Chelan PUD's Public Power Benefit Program, which is financed by surplus power sold on the wholesale power market.