Co-op Members to Decide on OPALCO Broadband

After more than a year of extensive study, OPALCO has a clear plan for how to expand the co-op’s telecommunication network and deliver high-speed Internet services to 90% of San Juan County. The OPALCO Board of Directors will ask the membership to demonstrate their commitment to the service before agreeing to build the infrastructure. A findings document is now available online at www.opalco.com that describes the technology, business modeling, financial assumptions and service offering of the plan.

OPALCO will begin a comprehensive and lengthy (6-9 months) member engagement effort to explain the plan, get input from our members and measure member commitment. It will take a pre-subscription commitment from about half the membership to make the financial model work.

The OPALCO broadband plan lays out a multi-use communication network to:

1. Meet OPALCO’s data communication needs for operating the electric distribution system
2. Address the unmet communication needs of first responders and public safety personnel
3. Provide 90% of the county with high-speed Internet services
4. Offer co-location facilities (poles, fiber backhaul and power) to cellular providers, encouraging them to expand service in our area.

The proposed telecommunication system would combine fiber in more populated areas with a LTE-based wireless solution in the less dense areas. OPALCO’s broadband service offering would provide members with:

• The fastest Internet connection that we can deliver to each location. In areas with wireless coverage, this is estimated at 10-15 Megabits per second (Mbps) and fiber direct connections will receive about 50Mbps.
• Digital telephone service, including unlimited long distance. Members will keep their current telephone number and use their existing telephones.
• Free wi-fi access in downtown areas and at ferry terminals.

The capital cost to build this system is estimated at approximately $34 million, to be funded by a loan from the U.S. Dept. of Agriculture’s Rural Utilities Service. The forecasted costs have increased from previous estimates as we have added more fiber direct connections in population centers to the design and gained more detailed information from our vendors. To support the capital infrastructure improvements, all co-op members will pay a $15/month cooperative infrastructure fee.

The cooperative infrastructure fee would be gradually applied to the membership as the infrastructure is built out. This charge would be ongoing, since it is needed to support the capital costs over a 25-year loan term and also to support future upgrades to the system. Voluntary donations from members will create a fund, like Project PAL, to help those who cannot afford the cooperative infrastructure fee.

In the spirit of a cooperative, OPALCO would provide the highest level of service possible, at the cost of service. Broadband/phone subscribers will pay $75/month. The total cost for a co-op member who subscribes to OPALCO’s service will be $90/month ($15 cooperative infrastructure fee + $75 subscription fee).

Today, OPALCO operates an electric system, and our members own the physical plant (equipment) that provides those services. The building of the proposed telecommunication system would be an expansion of OPALCO’s plant to allow us to also provide broadband services. The resulting system would be owned by the membership—just as the membership owns the electrical system. Thus, all members would contribute ($15/month) to building what we will all own. The broadband subscription fee ($75/month) would cover the cost of operating the system and thus would be borne only by those who use it. There will be an opt-out option for the cooperative infrastructure fee – and a penalty fee for those who later decide to subscribe to broadband services.

Under this plan, OPALCO would be the Internet service provider. OPALCO is working with existing local providers to transition the county to new data communications standards while retaining and incorporating local expertise in support of a new system. We expect that there will be some job creation, if the project moves forward.

Please go to www.opalco.com to read the full findings document, frequently asked questions and regular updates. Beginning in early spring, OPALCO will give ample time for member engagement effort to explain the details of the proposed plan and hear from our members. In the interim, we stand ready to answer your questions. If you would like us to provide an update at your service club, homeowners association or community meeting, please contact Suzanne Olson at 376-3537.

The success of this project is up to our co-op members. Cooperatives serve their communities through member participation and democratic control. There will be a way for members to demonstrate their commitment (or lack of) on our website in the coming weeks. We will also need help from the membership to distribute information during this engagement process. Just like in the early days when the co-op was formed, it’s going to take a dedicated and personal neighbor-to-neighbor approach to reach out to all of our membership.

Orcas Power & Light (OPALCO) was founded in 1937 to empower members to improve their quality of life in our rural communities. OPALCO serves about 11,000 member-owners on 20 islands in San Juan County.