PG Electric Coop’s home internet venture progressing well, officials tell supervisors

By: Michael Campbell | Twitter: @itsthesoup
Posted: Nov. 7, 2017 | 7:19 p.m. 

PRINCE GEORGE – Just over four months since Prince George County and the county’s industrial development board entered in a three-party, $1 million deal with Prince George Electric Cooperative to help finance their countywide fiber internet to the home project, officials with the cooperative came before the Prince George Board of Supervisors to give a progress report on the project.

During their report and in a later interview, Prince George Electric Cooperative President and CEO Mike Malandro said the project, which started as a pilot program one year ago that provided dozens of customers along West Quaker Road with high-speed internet, is progressing well and interest from the community continues to be robust.

According to Malandro, crews have constructed fiber-optic backbone lines that will not only link their two power substations in New Bohemia and just outside of Garysville along Route 10, but provide internet services to customers in that area, with additional fiber backbone installations planned for the future as part of the large-scale project.

So far, Malandro said they have 117 applications for internet services from residents in the area of the newly installed fiber line and “about 50 of them” are “engineered and ready to go,” with construction on those connections estimated to take place over the next two weeks. Following a meeting at Newville United Methodist Church, the head of Prince George Electric Cooperative was pleased with the turnout and interest from residents.

“We probably had greater than 75 people there,” he said. “It was a great turnout even though it was cold and rainy but everyone turned up and we got a lot of questions and we answered them.”

Many of the answers to the questions raised by those attending that meeting and an earlier meeting at the Prince George Rescue Squad could be found in the document that links PGEC, the Prince George Industrial Development Authority, and Board of Supervisors together, which details project goals and deadlines, minimum service offerings, and how connections would be conducted.

According to the document that was signed and approved by all parties during the Prince George Industrial Development Authority’s June meeting, which formally turned the $1 million in general obligation bonds earmarked for broadband efforts over to Prince George Electric Cooperative, PGEC Enterprises, the entity that is offering the internet services will have to have “installed and made available consistent and reliable broadband service” to a minimum of 500 new subscribers by July 1, 2021, with customers who were brought online by PGEC Enterprises through their pilot project along West Quaker Road and Prince George Drive not counting toward that 500 customer benchmark.

Residents and businesses that are “within 1,000 feet of a roadway” will be able to receive a fiber drop to their home or business as PGEC Enterprises works to expand internet services through the county, with service currently costing $82 per month, which includes a leased router.

If PGEC Enterprises is unable to make the 500 connections by July 1, 2021, they will be considered “in default” of their agreement with the IDA and county, resulting in a clawback of $2,000 for every connection not completed by PGEC Enterprises at the end of the contract.

The agreement also stipulates upload and downloads speeds for the service, requiring PGEC Enterprises to provide a minimum of 25 Mbps down and 3 Mbps up.

Finally, the contract calls for PGEC Enterprises to construct and make fiber optic cable connections available to all public structures owned and operated by the county that is within 1,000 feet of a VDOT road, including schools, libraries, fire stations, and wireless communication towers, among others.

PGEC Enterprises will also provide internet service to the Central Wellness Center, Prince George Emergency Crew building, the Burrowsville Fire Department and the town’s community center for the residential rate of $82 per month with a leased router during the term of the agreement. When that period ends, the rate would convert to the commercial rate.

If they reached the 500-customer benchmark before July 1, 2021, the agreement between the three parties would end.

For Malandro, only four months into the agreement, he is confident they can start bringing customers online.

“Things are going better than expected,” he said. “I told [supervisors] what I could guarantee from a timeline perspective, but I anticipated it would go much quicker and, in fact, it is going quicker. I am confident we can get at least 50 people online by the end of the year.”

Malandro noted that PGEC Enterprises is continuing to go out for additional funding to help finance the project, confirming they are working to obtain a Tobacco Commission grant to help with the cost of expanding internet services into Sussex County.

“Prince George County put us in business,” he said. “Hopefully, if we get some money from The Tobacco Commission, that is just going to push us over the goal line of having cash and the capital to make a real go at this.”

A question that came up during Prince George supervisors’ discussion of the eventual deal between the county, the IDA, and PGEC was the cooperative’s commitment to continuing to expand internet services across the county once they reached the 500-customer benchmark as stipulated in their agreement.

Following his presentation before supervisors in October, Malandro said PGEC Enterprises are “in this for the long haul” and the business model they have is conducive to expansion.

“I feel once we get to about 750 customers, we will be in a position to have a lot more options than we did yesterday,” he said. “At that point, we should be able to, at a minimum, grow the business ten percent year-over-year, and if we start doing any sort of leveraging, we would be able to reach 40 percent growth year-over-year, which is going to put us in a position to expand in Prince George, continue to expand to Sussex, and possibly enter Surry and Dinwiddie.”

“I feel like this is all about how much we can handle with the resources we have,” Malandro continued.

A key factor in the cooperative’s efforts in the area of rural broadband expansion is newly elected Congressman Donald McEachin (D, VA-O4), who has made expanding internet service into rural and underserved communities a key issue as much of his district falls within that criteria. Malandro said the congressman has been an important advocate for the cooperative as they move forward with this venture.

“He has been fantastic,” he said. “Anytime I have called him asking for help or a letter of support, he has been Johnny-on-the-spot and, if we can find a way to make some real progress, I know he will be there every step of the way.”

As PGEC approaches the end of 2017 with over 110 applications for internet service to homes, Malandro remains hopeful that PGEC Enterprises can reach a completion goal he referenced following the June IDA meeting where he projected they would reach the 500-customer benchmark in two years.

“I think whats going to happen here is if The Tobacco Commission grant comes through, that is going to put an extra helping of food on our plate,” he explained. “So we are going to have to strike a balance between the two because we are going to be working from two deadlines and two fronts,” referring to both the Prince George and a proposed expansion into Sussex.

“Do I think we will finish in two years in Prince George? I am hopeful.,” Malandro continued. “We can definitely do it if we don’t have the Sussex [project] going on also. But with that going on, it may slow us down a little bit but we have got 117 applications out there and we are going to get as many done as we can by the end of the year and it does go really quickly.”

He noted that the installation of fiber backbone isn’t really impacted by weather, such as rain, but, when it comes to ground saturation during the connection from the fiber network to homes, periods of dry weather like we have had recently do help their efforts.

“We are moving fast, we are committing everything to this, and we can always bring in more resources if we have to in order to complete this work if I feel like that would be the best option to get it done,” Malandro said. “At the same time, we don’t want to harm our ability to put more infrastructure out by being inefficient with the subsidy money we have received.”

To learn more about PGEC Enterprises ongoing fiber-to-the-home project, visit their website at http://pgecfiber.com.

Copyright 2017 by Womack Publishing
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