By Staff
You would have thought that some City of Washington officials had discovered a gold mine when they heard how the city could triple the revenue it gets from companies that attach lines to city-owned utility poles.
The idea of an extra $46,000 a year may sound great, but dig a little and you may find that the reality is it might not be all that easy to get and won’t come without a cost.
The city currently charges cable and phone companies $5 per attachment per year. Council members were told Monday they could increase that to $15 and earn $46,000 more a year. While every penny counts, remember the city’s electric fund is a $36 million a year enterprise. To put it another way, an extra $46,000 a year represents about half of what the electric department spends in a single day. In other words, it’s safe to say that higher pole rental fees alone won’t produce any significant reduction in your utility bill, but it could produce an increase in your cable TV bill if your cable provider tries to recoup the money it pays to the city for attaching cable to city utility poles.
Businesses like Suddenlink, Embarq, Tri-County Telephone and Bath Cable TV routinely attach wires and equipment to city poles. Embarq doesn’t pay the annual rental fee, instead it splits the initial cost of installing a pole with the city on a 50/50 basis.
The city is likely going to have to justify the new rate, if it decides to increase the pole-attachment fee. That means doing an inventory of the 14,000 poles in the system. The Washington Daily News did an informal survey and counted nearly 60 poles along Market Street from Third Street to 15th Street. That’s just 12 blocks. The city has 388 miles of power lines to serve 12,000 customers in Bath and Pinetown to the east and Martin and Pitt counties to the north and west. There are about 7,000 poles that have some sort of attachments, according to Keith Hardt, the director of the electric department.
The survey and the legal negotiations required to raise the fee will be expensive. Hardt said it may take four to six years to recoup the cost.
Before the city could increase the fee, it and the attaching companies would have to determine the owner of a pole and what company’s wire or equipment is attached to what pole. Even the age of the pole could play a role.
What the city may also find out is that by raising the fee they charge others, it might also be charged a higher fee when they city attaches a line to a pole it doesn’t own.
But say in the end the City of Washington can justify the extra $10 per pole. Other companies would be obliged to pay it, and at least in the near term may not increase their rates to offset the higher cost. However, it’s not unreasonable that at some point in the future you may see your cable bill increase because that company has to offset the higher fee it must pay the city.
Raising the rate for pole attachments is something the city should look into. However, in doing so, city leaders should have their eyes wide open not simply their hands outstretched to grab more money. Increasing the fee for pole attachments is not simply a painless way to put more money in city coffers. It may seem painless now, but it won’t come without a cost.