Coast Electric and the
Possibility of Broadband Service
Broadband and Your Co-op
In 2019, the Mississippi legislature passed a bill allowing electric cooperatives the ability to provide rural broadband service. Since then, Coast Electric personnel have been working to determine the best plan of action for our members.
Now, we are asking for your vote. Coast Electric's board of directors has voted to change the cooperative's Certificate of Consolidation, allowing Coast Electric to offer broadband service if it is determined to be cost effective and beneficial for members. We are now asking members to vote to ratify those changes. A "Yes" vote means you support your co-op offering broadband service and a "No" vote means you do not support these efforts.
You will be able to vote beginning July 13 on coastepa.com, in any Coast Electric office or by mailing in the Annual Meeting proxy registration card and broadband ballot that will be mailed to your home.
What we believe:
Electric cooperatives were formed more than 80 years ago for the purpose of serving rural Americans. Today, we believe reliable, affordable internet service is a necessity for everyone, just as reliable, affordable electric service is a necessity.
As your local electric cooperative, we have a responsibility - especially as a company owned by members like you - to make sure this venture wouldn’t threaten the financial stability of Coast Electric.
We are working to see if we can find a balance that allows us to provide a necessary service and keep our company strong for the people we serve. If we decide to offer new services, it will be for the benefit of our members, like you and won’t negatively impact our core job – powering your homes and businesses.
News / Updates
Broadband provides consumers with a link to the internet, including voice, data, video and email services. The connection Coast Electric is considering would be through a fiber optic connection, which many believe provides the fastest and most reliable broadband service to consumers. Coast Electric would need to extend fiber across areas of its system, mostly on its own poles, to provide that fiber access to consumers.
- It requires that electric cooperatives do feasibility studies to determine if this can be done without putting the electric cooperative at significant risk.
- It allows the cooperative to provide the service through several options. Cooperatives may form subsidiaries, enter partnerships, or form other types of affiliates to provide broadband service.
- The law prohibits an electric cooperative from providing the service through the cooperative itself. It must be done through a separate company, maintaining separate accounting books. A cooperative cannot use electric revenue to provide broadband service, again limiting the risk to the electric cooperative and its members.
- The law requires the cooperative, if it decides to provide broadband service, to commit to making broadband available to all members at some point.
- It does not require a cooperative to offer broadband and it prevents a cooperative from requiring a member to take the service.
- One of the requirements of the bill obligates Coast Electric to conduct feasibility studies that will help determine if broadband is a good option for our community. To date, we have completed three feasibility studies.
- A team of management leadership has worked diligently since the Broadband Enabling Act was passed into law in February 2019 to learn as much as possible about broadband networks, terminology and types of broadband systems. This learning process is on-going.
- This team has met with various broadband companies to get proposals for installing a broadband network. Our managers are working with our board members to determine next steps.
- We have conducted surveys of our members to better understand the needs of our community.
- In the summer of 2020, we are asking for your vote. Coast Electric's board of directors has voted to change the cooperative's Certificate of Consolidation, allowing Coast Electric to offer broadband service if it is determined to be cost effective and beneficial for members. We are now asking members to vote to ratify those changes. A "Yes" vote means you support your co-op offering broadband service and a "No" vote means you do not support these efforts.
- If members vote in support of broadband, Coast Electric will conduct further research to determine if the service will be in the best interests of Coast Electric members.
When determining whether or not to offer broadband service, there are several considerations. A few are:
- Cost. There is a reason telecommunications companies have not yet offered broadband service in certain areas. It is costly.
- Are there enough households and businesses in our service area that need broadband service?
- How many of those will it take to make this venture feasible?
- If there is the need and the interest, what type of business structure do we form? Do we create a subsidiary or form partnerships?
- Will we need to hire additional employees and how many?
- Are there people available to hire with the necessary technical skills?
While there are obstacles, we believe there are opportunities as well. Some of the benefits of offering broadband service in our area include:
- Co-ops like Coast Electric are already an essential part of the communities we serve. We are familiar with the needs of our members and our communities.
- According to some reports, Mississippi ranks No. 49 in the U.S. in broadband availability. If co-ops provide broadband service, Mississippi could begin to move up in the rankings.
- Education and remote health care are just a couple of the areas that could benefit as availability is potentially expanded into the rural areas of the state.
- The cooperative business model puts an emphasis on service to members, not profits.
Yes. Coast Electric uses many communications systems linking offices, substations and other equipment to remotely gather information that enables us to effectively manage the electric system. Adding more fiber to our system would improve communications, leading to a smarter grid improving efficiency and outage response times in areas where fiber is deployed.
The state law that allows electric cooperatives to enter the broadband business states that there can be no cross subsidization between the electric co-op and broadband subsidiary. No costs for this project will be borne by the electric co-op or its members. Ultimately, the cost will be borne by the customers of the broadband company. Since we are a not-for-profit electric utility, we have access to low-cost financing and can take a longer approach to payback. We can’t speak to funding sources at this time for competitive reasons and other prohibited communication rules. We do know that our proposed pricing will be the best in the marketplace for the best service, with symmetrical speeds and no data caps.
Following member approval of the amendment to Coast Electric’s certificate after the Annual Meeting on Aug. 25, a service and financial plan will be developed for the areas in which fiber will be installed. Before the board considers authorizing this project to proceed, the full plan will have to be developed.
If the board does vote to proceed, we will provide members information on the plan. Installing fiber for broadband is a lengthy process, and it would be years before all members would have access to some form of broadband.
For Coast Electric to move forward with broadband planning in a timely manner, members must vote to ratify changes to the Certificate of Consolidation that would allow the cooperative to determine if offering broadband service is feasible. No further decisions can be made until the amendment proposed by the board is approved by the membership.
The board of directors of Coast Electric Power Association has voted to request the membership to ratify a change in its Certificate of Consolidation. Following the Mississippi Legislature removing the prohibition for electric cooperatives in Mississippi to offer broadband through an affiliate or unaffiliated broadband provider, the board of directors is asking the membership to ratify the addition of the following provision to its Certificate of Consolidation:
The purposes for which the Corporation is organized include performing any and all acts permissible under the Electric Power Association Law, Laws of the State of Mississippi of 1936, Chapter 184, as from time to time amended; and also performing any and all acts permissible for electric power associations under the Mississippi Broadband Enabling Act, Laws of the State of Mississippi of 2019, H. B. 366, as from time to time amended. That the other Articles be and the same remain as originally issued, including any and all amendments thereto.
The board of directors is recommending that this provision be added so that Coast Electric has the option, if determined by the board to be needed and financially prudent, to take steps on its own, or with a partner already in the broadband service industry, to provide broadband services. The board has not made a final decision to offer broadband, as extensive study and planning is required to determine financial prudence, but the board is of the opinion that it should, at this time, ask the membership to ratify broadband as a potential option for Coast Electric through this amendment to the
Certificate of Consolidation.
Pilot Project Coming to Pearl River County
Coast Electric Power Association has been awarded a grant that will bring high-speed internet service to residents in northern Pearl River County, the most unserved and underserved area of the cooperative’s service territory.
Earlier this month, Coast Electric, along with 14 other electric cooperatives in Mississippi, submitted grant applications for broadband high-speed internet pilot projects through the state, funded by the federal CARES Act coronavirus recovery plan.
The Mississippi State Legislature set aside $65 million in matching funds for broadband deployment by electric cooperatives throughout the state. This grant funding will be awarded through the Mississippi Public Utilities Staff.
This pilot project is a small-scale venture that will help the cooperative determine and evaluate the feasibility of providing broadband service to other areas of its service territory.
The pilot project will target more than 3,700 members served by the Derby and Crossroads substations in northern Pearl River County.
As part of the requirement for receiving CARES Act funds, pilot projects are moving quickly with service being available to those in the designated area this fall.
Fiber optics give us the ability to serve you with state-of-the-art broadband service. We will offer two options, 100 Mbs for $54.95 plus tax and 1 Gbs for $84.95 plus tax, with a router and managed Wi-Fi included. The service will be the same for upload and download speeds, without a data cap.
Yes. Your vote will determine whether or not we continue developing a full broadband service plan. If members vote yes, we will continue with our research, and a full service and financial plan will be developed and presented to the board. If members vote no, our research for a full-scale project in our area will stop there. Whatever the vote, we will continue plans for our pilot project in Pearl River County.
If you live in northern Pearl River County and are interested in high speed internet service provided by Coast Electric, you can fill out out this interest form. Filling out this form does not obligate you to sign up for service.