[1st-mile-nm] Farmington, N.M., Utility Considers Offering Internet Service

[Richard Lowenberg]

Farmington, N.M., Utility Considers Offering Internet Service

Farmington Electric Utility System is exploring the feasibility of 
offering high-speed Internet service to city residents. Officials say 
the service would benefit customers while providing a new revenue 
stream.

BY HANNAH GROVER, THE DAILY TIMES / SEPTEMBER 14, 2020

https://www.govtech.com/network/Farmington-NM-Utility-Considers-Offering-Internet-Service.html

  (TNS) — Farmington Electric Utility System is exploring the possibility 
of adding high-speed internet to its offerings, which could help bridge 
the digital divide within the utility’s service area while also 
providing a new source of revenue.

A feasibility study is underway looking at that possibility. The city 
has contracted with Finley Engineering for the engineering portion of 
the feasibility study and has contracted with CCG Consulting to perform 
the financial and survey aspects. Those two firms previously teamed up 
for a similar study in Cortez, Colorado.

The Public Utility Commission learned about this proposal during its 
Sept. 9 meeting. A recording of that meeting is available at 
fmtn.org/AgendaCenter.

FEUS Administrative Services Financial Analyst Olena Erickson said FEUS 
may be able to provide higher speeds at rates comparable to what San 
Juan County residents currently pay.

The pricing model presented to the PUC ranged from $60 for 100 megabytes 
per second to $80 for one gigabyte per second for residential. On the 
commercial side, prices ranged from $75 for 100 megabytes per second to 
$95 for one gigabyte per second.

This concept is not new and nothing in state statute prevents a 
city-owned utility from offering broadband Internet to customers.

There are success stories across the country, the most famous being 
Chattanooga, Tennessee. But Erickson warned there are also cities that 
tried offering broadband and failed.

The price tag to offer the service is large — $156.7 million in bonds.

"FEUS is debt-free today. We have paid cash for all of our assets and 
we're very conservative and that's why we have the lowest rates in the 
region," said FEUS Director Hank Adair. "So this will be a change in 
approach for us."

Farmington may be able to receive about $9.5 million in grant funding by 
participating in an auction where various entities bid for money to 
install and offer broadband in rural areas. This could cover parts of 
FEUS’ service area, such as Navajo Dam.

If FEUS chose to pursue offering broadband, it would not help bridge 
gaps in the Navajo Nation because very little of the tribal lands are 
served by FEUS.

The consultants have recommended if FEUS chooses to pursue broadband it 
should enter the auction this October and should provide internet 
service for the entire service area, not just rural parts.

But some commissioners expressed concerns about the long-term debt and 
possible technology changes. Adair said more information will be 
provided in the future as the feasibility study is completed.

While they had concerns, the commissioners overall supported pursuing 
the idea.

©2020 The Daily Times, Distributed by Tribune Content Agency, LLC.



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Richard Lowenberg, Executive Director
1st-Mile Institute     505-603-5200
Box 8001, Santa Fe, NM 87504,
rl at 1st-mile.org     www.1st-mile.org
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