Coop broadband expansion OK’ed in 14 Western Kentucky counties

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FRANKFORT, Ky. (WTVQ) – It’s opening doors to rural broadband service through electric cooperatives in states like Alabama and Mississippi.

And it could come to Kentucky after the state’s Public Service Commission allowed a rural electric cooperative to invest in rural broadband service in 14 Western Kentucky counties.

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t the same time, recommendations were made for the state’s General Assembly consider changing state law to more easily allow such investments.

Alabama and Mississippi, among other states, have approved similar changes in the last three years, opening the door for electric coops who already serve rural areas to compete with more-established companies that often don’t want to invest in areas where the population density is low.

The Kentucky Public Service Commission gave conditional approval for Kenergy Corporation’s application to provide a capital investment to Kenect, Inc., which will enable the start-up to move forward with plans to expand rural broadband access to 14 Western Counties in Kentucky.

“All Kentuckians deserve to have access to quality broadband services, and our office is pleased to support this endeavor while ensuring it does not unnecessarily increase the cost of electric utilities for Kentucky consumers,” said Attorney General Daniel Cameron, whose Rate Intervention decision supported the move.

he Attorney General’s office argued that because the expansion of broadband networks benefits consumers and businesses, the PSC should provide a waiver allowing Kenergy to subsidize non-regulated activities, in this case, broadband services, as long as the risk of increased electric rates to consumers is appropriately mitigated.

The brief also recognized the General Assembly’s ability to clarify the roles of electric distribution cooperatives in broadband expansion.

In July of this year, the directors of Kenergy, a non-profit electric distribution cooperative that sells electricity, organized Kenect as a for-profit corporation engaged in broadband services.

Because Kentucky statutes prevent a regulated utility company, Kenergy, from subsidizing or entering into agreements to finance “nonregulated activities,” like broadband services, Kenergy sought a waiver from the Kentucky Public Service Commission to provide financial backing for Kenect.

On Thursday, October 22, 2020, the PSC issued an order to provide a waiver to permit Kenergy to make a one-time capital investment of $3 million to support broadband expansion.