> The source you linked doesn't show a transfer from EBP fiber to EBP.
You are correct that no such transfer is explicitly shown. I don't know if it's done or not behind the curtain, but you may recall that I explicitly accounted for this scenario in my fifth paragraph of my previous post.
So summarize, EPB fiber's profit in itself is enough to pay for debt service regardless of if an internal transfer is made or not. Furthermore the money doesn't simply disappear, just because it isn't transferred. The profit is still there, regardless of how it is accounted for and where it is kept.
EPB fiber is making money, EPG's debt is being paid off (in advance I might add), EPG fiber is not being subsidized (the power side is) and cash is being accumulated.
No matter how you look at it, EPB fiber is both profitable and sustainable.
> Moreover, it's not the debt outstanding that matters, but the original capital investment.
Oh, so we are moving the goal posts now, eh?
Not being able to claim that EPB fiber is unprofitable, you are now instead taking issue with it not being profitable enough.
But, to address your original point directly, no, the original capital investment does not matter. Only and only the debt outstanding matters if part of the original investment was funded by other means.
It's preposterous to claim that an expansion of a project would have to produce returns twice; once on the original project and again in full when the project is built upon via an expansion.
> A real company would be expected to generate a return on the original $390 million that exceeded the weighted average cost of capital.
This is provably false.
If a company built a national network to serve it's own internal communications needs, it would then not be expected to show (additional) returns on that national network, if it later decided to build out a local network in one of the markets in order to expand it's business.
The company would only be required to show returns on the additional investment it made in the local market. Doubly so, if the company received a federal grant to build out the original national network.
> Having a big chunk of that money fronted internally without imputing an interest rate to it is a subsidy.
No money was fronted internally without any interest. EPB made out a $50M loan to EPB fiber which EPB fiber later repaid in full with interest.
EPB did receive a $111M federal grant to build a smart grid, which it did. The grant was not used to build EPB fiber's network. That capital was raised separately through a bond.