Receiving nearly $16 million in smart grid stimulus funding was certainly a boon to the New Hampshire Electric Cooperative, as it was to the other 99 recipients, but the funding had a different meaning for this New Hampshire-based utility. It is owed $400,000 from Fairpoint Communications, the area’s main telco, which is busy wading through bankruptcy.
NH Electric won’t likely see that $400K from Fairpoint, although its chances are better than Fairpoint’s shareholders. According to a report today in NH’s Nashua Telegraph, Fairpoint rents lines on the co-op’s poles and included the co-op’s invoice as part of its Chapter 11 bankruptcy reorganization filing, listing it as its biggest N.H.-based unsecured creditor. Under the reorganization plan, the banks will get at least half of the $2.1 billion owed in cash plus 98% of the new company. The unsecured creditors will split the remaining 2% on a prorated basis, but only if they accept the deal.
Both companies have been hurting in the economic recession, but Fairpoint reportedly needs broadband stimulus funds badly. This dynamic in N.H. is especially precarious considering the advice of Craig Settles, CEO of broadband consultancy Successful.com, for broadband stimulus hopefuls to team up with smart grid fund recipients to strengthen their bid for funds. Fairpoint’s troubles won’t help its case, to say the least, but the telco clearly has bigger fish to fry. There are still a lot of issues that need to be resolved for both companies, and it won’t be a speedy process. Fairpoint’s bankruptcy hearings are just beginning and a detailed reorganization plan won’t be submitted until December at the earliest.