Bonds and Financing

City Council Approves Bond Issuance For Tennessee’s Dickson Electric Broadband Project

The city council of Dickson, Tenn., on Aug. 15 unanimously approved a resolution to authorize the issuance of up to $50 million in Electric System Revenue Bonds to finance public power utility Dickson Electric System’s (DES) broadband project.

According to the city council’s website, DES General Manager Darrell Gillespie said the DES Board of Public Utilities approved borrowing the money at its Aug. 2 meeting and he expects the first customers to begin getting broadband access from DES before the end of the year.

DES notes on its website that in 2021, the State of Tennessee Comptroller’s office reviewed the comprehensive business case from DES to assess the viability of providing broadband and other services.  The review concluded that the division would be viable and provide services that are greatly needed by those in the DES service area.

The business case was developed with the assistance of industry consultants that have a wealth of knowledge and experience in providing analysis and guidance to create an unbiased and successful business plan, DES said.

In addition to the Comptroller, the Tennessee Valley Authority (TVA) conducted an extensive review of the broadband division plan and the financial impact to the electric system, DES said.

As the broadband division will utilize the existing DES fiber network to provide broadband and other retail services, the newly created division must pay the electric system for the portion of the network used. This financial review covered every aspect of the two divisions with the objective to protect the electric ratepayer and prevent the broadband division from being subsidized by the electric system.

TVA concluded that the proposal would not be subsidized by the electric system, and no contingencies were placed on the Broadband or Electric divisions as part of the approval giving DES the green light to move forward.

Additional information about the broadband project is available here.