In this post i share KUB Fiber Fiscal Year 2024 Financial Report Key Takeaways.
Before that, let’s review that this blog asked alot of questions and even spoke at a KUB Board meeting about this creation before the Board launched into this epic fail. Also, Harriman (Roane County) is being the “me too” with a lot of questionable positions.
If you are an electric, water/sewer and/or gas customer, when you log on to pay your bill, the landing page is KUB Fiber solicitation. They have road side signs, sponsoring the soccer team (if you ask what soccer team, that is failure of marketing 101 in and of itself)
Also, let’s consider the statement from an expert, “The report highlights the risks to taxpayers when local governments get into the broadband business. Building and running a network costs far more than they anticipate, and they struggle for years to attract customers, who already have multiple private sector options. The report is clear: GONs don’t make financial sense.” – Anne Marie Walp President – TN Cable and Broadband Association
• KUB Fiber’s approved business plan allows for up to $55 million in loans from the Electric Division. To date, $37 million has been loaned, including $7 million in May 2024. $35 million of those loans mature in 2030, while the remaining $2 million matures in 2032.
• As of June 30, 2024, the Division had a $34.6 million note payable to the Electric Division in outstanding debt.
• KUB Fiber construction began in June 2022. As of June 2024, it had 10,759 fiber
customers. It added 8,423 customers in FY 2024. (KUB has approximately 501K total
customers – it is still not ckear how many will ultimately be eligible for fiber.)
• In June 2024, as part of KUB’s Inflation Response Plan, the Board approved the next
phase of electric, gas, water, and wastewater rate increases to support the Century lI
program and the expanded fiber network. The three approved electric rate increases
are effective April 2025, April 2026, and April 2027.
• The Fiber Division’s Change in Net Position decreased $8.2 million in fiscal year 2024.
Comparatively, net position decreased $9.2 million in fiscal year 2023.
• The Division’s Change in Net Position was ($8.2 million) in fiscal year 2024, due to $6.5
million in operating revenues and $0.5 million in interest income offset by $13.7 million in
operating expenses and $1.4 million in interest expense.
• Operating revenue increased $5.5 million compared to the prior year. Operating
expenses increased $4.2 million. Operating and maintenance (O&M) expenditures
increased $4.1 million.
• KUB anticipates adding 10,000 additional fiber customers during fiscal year 2025. (Note: this is down from previous estimates of adding 30,000 customers per year.)
• Debt pressure really escalates in FY 2027-28, with $8.6 million in loan payments due,
and in FY 2028-29, when $15 million is due.
