Traverse City Executives Support USDA Loan Application | Local news


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TRAVERSE CITY – Federal loans once used to electrify rural parts of the United States could fund Traverse City Light & Power’s efforts to complete construction of its fiber-optic network.

City commissioners on Monday unanimously agreed to support the utility’s request for an $ 18 million rural utility loan from the United States Department of Agriculture. This money, if approved, would finance the efforts of the municipal utility to extend its fiber optic network throughout its territory and to all of its 12,933 customers.

This network would serve as the backbone of a smart grid, said Jason Allen, USDA state director for rural development.

A smart grid would allow the utility to better monitor power consumption and outages, as previously discussed. The utility could also offer customers lower tariffs in exchange for the utility’s ability to remotely adjust their air conditioning on hot days when consumption on the utility’s grid peaks – and electricity is at its peak. more expensive.

It would also allow all utility customers to access high-speed internet, Allen said.

This aspect has dominated the conversation since 2016, when the city-owned utility started looking at expanding its fiber optic network, as previously reported. But smart grid applications have always been part of the discussion, and the utility first built its “dark fiber” system – the heart of the network – to communicate with its substations.

City manager Marty Colburn said he believes city commissioners should support the utility’s demand. The vote does not commit the city to accepting the loan – this would require approval from TCL & P’s board of directors and the city commission.

Colburn said city leaders should look at a year or more of financial data from the electricity supplier’s first crack in building its fiber-optic network before commissioners commit to accepting the money .

Construction to build the fiber optic network to approximately 2,200 customers in the city’s downtown core and some adjacent neighborhoods is largely complete, and more than 130 high-speed Internet customers have connected, as previously reported. . Work in another residential area of ​​around 1,000 homes is continuing.

Tim Arends, executive director of TCL & P, said if the loan is approved he expects the utility to have the data by then. The utility’s recent experience in implementing bill financing, another USDA program that allows customers to fund energy efficiency and renewable energy projects and repay them out of pocket. their electricity bill, shows how much time it takes to work with the agency.

Commissioner Brian McGillivary said he maintains customers can track their electricity usage in real time, while Mayor Pro Tem Amy Shamroe sees smart grid construction as a proactive measure to keep utility up to date.

“We have lived for at least 40 years a generation of people not investing in our infrastructure, and this is an opportunity to do so so that we are a 21st century public service here,” Shamroe said.

Recent changes have allowed utilities to obtain loans from Rural Utility Services’ self-sustaining fund with billions available, Allen said. This fund dates back to 1936, and TCL & P may be the first municipal utility to borrow from it to build a smart grid.

Interest rates on these loans are currently 1%, Allen said.

He cited the Great Lakes Energy Cooperative project as a model for TCL & P. This co-op borrowed $ 190 million to build a smart grid and start its own high-speed Internet business.

The Traverse City utility has already spent $ 3,309,426.90 of its fiber fund, where TCL & P accounts for payments from its “dark fiber” network users. That’s what he paid Fujitsu Network Communications to build the first phase, plus $ 849,663 to run and maintain it for the first year.

City leaders agreed in September to lend an additional $ 800,000 in economic development funds to expand the first phase to a broad swath of the central district.

Mayor Jim Carruthers said he heard concerns about the cost of TCLP Fiber’s services, which Shamroe and McGillivary said appeared to be based on an ad listing the price of the provider’s fastest connection available – $ 89 for a gigabit per second upload and download speeds. Shamroe said it has one of the slowest and cheapest connections and urged people to take a close look at prices and speeds compared to other providers.

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