–by Steve Jung —
OPALCO has been good to me. I’ve been impressed with the reliability and relatively low cost of the primarily “green” electricity it delivers to the home my wife and I built on Orcas Island 15 years ago. Furthermore, I’ve welcomed the arrival of truly fast broadband internet access as a result of the utility’s decision to utilize its fiber optic cable network for that purpose. It’s good for our first responders, our safety, and our economy, and, yes, it allows us to live as if we are in the mainstream of modern life rather than a backwater.
I have, however, been dubious about OPALCO’s claim that broadband internet is purely a side benefit of its buildout of the fiber network, and that therefore the costs of that buildout should be borne primarily by electricity users. Is it true, I wondered, that our utility coop would have shouldered the very considerable costs of creating this fiber network whether or not it could be used for broadband?
A few months ago, I happened to express this question in the presence of an OPALCO representative, and before long I was invited to a meeting at the OPALCO offices on Orcas. There I was introduced to Vince Dauciunas, a member of the Board of Directors and an electrical engineer with impressive credentials in the theory and practice of electrical power generation and transmission. Vince proceeded to educate me in what has become known as “smart grid” technology.
I don’t pretend to have retained all that Vince explained to me. But much of it can be found at this website provided by the Bonneville Power Authority: https://www.bpa.gov/projects/initiatives/smartgrid/Pages/default.aspx. I came to understand that smart meters, interactive and automated control of power distribution and other intelligent energy technologies can not only improve energy efficiency, reduce power costs, and lower greenhouse gas emissions, they are absolutely essential for the operation of any grid that hopes to incorporate distributed power generation (think solar, wind) and storage (think batteries). Vince’s final point sealed the deal for me: every single one of the 186 investor-owned electric utilities in the United States is currently implementing smart grid technology, as are most publicly-owned utilities! Guided by these facts, OPALCO made its decision to install and operate a smart grid on our islands well before the use of fiber optic cable to provide broadband internet was even contemplated.
I pass this information along here in the hopes that it will help others who may have the same question I had. I do it without any desire (or intent) to get enmeshed in the occasionally ill-mannered “debate” that has gone on around OPALCO’s rates and the methods in which the coop has sought to provide broadband internet service. I will say that I’m personally glad OPALCO management stepped to the plate to shoulder this responsibility. And I look forward to the day when we will all benefit from living on a “connected” island, and when most people understand how lucky we’ve been to get there.
Steve Jung lives in Olga
Steve, I’m happy it has all worked out well for you. That is not the case for a lot of people. This isn’t about how the board did or didn’t do some thing it’s about who is paying for and what they are receiving. The rate hikes have hurt the low income people the most. Whether the increase is 5% or 50% doesn’t matter, we can’t afford it and we definitely can’t afford to pay the “middle” or “last” mile to get broadband to our homes. Those that can least afford it are still paying but will never receive the benefit of high speed internet. We are stuck with CenturyLink who will care even less about the San Juans as their customer base here shrinks. Did you happen to ask them what they plan on doing for us?
Steve,
A few things for everyone to consider:
1) The horse is out of the barn. The Opalco board has approved $12.5MM for grid communications. Approved a $7.5MM loan to Rock Island for which the electric side is paying the interest. Approved purchased Rock Island for $0.5MM. So we are somewhere north of $20MM. No going back on that now.
2) All the internet and communications benefits are good for some people. Faster video games, better movies and for some, better business opportunities. Nothing wrong with that. There are lots of folks that want these improvements on our islands. Let’s move right on into the 21st century.
3) Private utilities earn their return (profit) on every dollar they can invest in their systems that their regulators approve. They have every incentive to spend as much as they can on the “smart” grid. It is not surprising that every private utility has a “smart” grid. For years now there has been a continuous stream of seminars trying to teach utilities how to monetize that invest (get it to pay back for the rate payer) in “smart” grid. Perhaps they have actually found some ways to make the investment pay. For public utilities (Opalco), this reasoning does not make sense.
4) For large complex distribution systems, there can be benefits for a “smart” grid. PSE, our nearby private utility, has something like 1000 substations and they have a “smart” grid. Opalco has a simple system with only 15 substations. Will Opalco be able to get $12.5MM of benefits from its grid communications investment?
5) Our current meters are not quite smart enough for the “smart” grid so they will need to be upgraded. Perhaps most of us will not require this upgrade as we will not be “buying and selling” power to Opalco.
6) The real challenge now is the fair allocation of the grid communication and Rock Island Communication (RIC) costs. Will RIC be repaying Opalco’s electric customers for the $7.5MM loan at an interest rate that reflects the speculative venture that RIC really is (say 15%) or at Opalco low cost government sponsored rates (2-3%)? Will RIC be paying for the use of the $12.5MM invest(paid for by the electric ratepayers) in grid communications? Will RIC be paying their fair share for the electric side assets they are using? Will RIC be paying for its share of management efforts?
I would like to hear answers to Tom Owens’s questions. I also have a few of my own, left as a comment several days ago but I’d like to ask them here. I’m not nearly as knowledgeable as some folks, especially in finances and technology, but these questions are commonsense and I would like answers.
1) We are spending millions and millions of OPALCO stakeholders’ money on putting Fiber-optics into our submarine cables. How much does just the fiber-optics part cost, vs the electric part?
2) How much and how quickly does this fiber-optics technology change, and how fast does what we are currently installing become obsolete and need replacing?
3) When the technology improves, does that mean we have to lay the “new improved” fiber-optics in the underwater cables every time our current technology becomes obsolete? What will the costs of that be?
4) We’ve all experienced the outages caused by some vehicle hitting a fiber-optics pole on the mainland. With so much of this above-ground, how often can we expect these outages to happen? Is this always going to be a vulnerability with the fiber optics?
5) Are we using the simplest and cost effective net grid to do the job, rather than the most complex and expensive grid, especially if this technology moves along as fast as computer technology, and becomes obsolete in just a few years?
There are good points in Steve Jung’s guest opinion and all of the comments above. Yes, without a “smart grid,” OPALCO will not be able to accommodate the anticipated complexity of dealing with the many expected distributed sources of electrical power; we have to have a smart grid one way or another. But I don’t think OPALCO’s approach is (or was) the only way of achieving it. Some users like Steve can afford the several-thousand-dollar up-front cost of fibre-optic broadband and are benefitting greatly from their investments. But others, like Darlene Talbot and Sadie Bailey cannot.
In a recent Islands Sounder article, Rock Island VP Dan Burke called fibre-optic broadband the “platinum” of Internet service. But many people don’t need and can’t afford platinum; they would prefer gold, or silver, or possibly even copper. And Darlene makes an excellent point I hadn’t realized — that as its customer base narrows, CenturyLink’s other customers will probably have to pay more just to get the same old lousy Internet service.
My own preferred solution was one that Chris and Chom Graecen of Lopez Island advocated before the fateful OPALCO Board’s decision to buy Rock Island and become a retail Internet-service provider, dealing directly with customers. That proposed solution was to continue building out the smart grid and leasing excess capacity to ISP’s like Orcas Online, Rock Island and, yes, even CenturyLink — that is, to become a WHOLESALE Internet provider.
But as Tom Owens says above, the horse is out of the barn.
I know no one will probably read this… but my last bill for March – I only used 332 kwh – which means not much heat (and thankfully, not much was needed) – was $70.32.
Just wondering how it will be when we get the La Nina and the Arctic Express bitter cold that comes with those, and I HAVE to use my electric heat. What happens to all of us low income people with only electric heat then? I already use LiHEAP every year, I have had to use PAL for the last two years (have paid into it since becoming an OPALCO member – it averages out to only about $6 per year. I wish everyone would pay into it.)
Although I’m grateful that OPALCO now has a low income program….it seems a small concession for what is to come. What happens when fixed facility rate is $89 a month (if it stops there) PLUS my very low KWH usage? where do we go in the event that we need to stay in a shelter because we can’t afford the heat? what happens to our pets? i think it’s good to ask these questions now.
I was actually told by someone whose name I will keep anonymous, that if I can’t afford the rates, maybe I should move to where I can afford them. Ouch. that hurt. Why did we not use Chris and Chom Graecen’s solution? Why did the member/stakeholders not have a vote on this life-changing (for many of us) move to acquire Rock Island? It feels like we have been thrown under the bus, even with the concessions made. I feel very sad about possibly having to leave my home of 35 years.
I hear your pain, Sadie, but I can’t claim to feel it. Using those figures, you are paying 21 cents per kilowatt hour, while we are paying about 11 to 12 cents. If the OPALCO facility charge indeed increases to $89 per month and all else stays the same, you’ll be paying about $0.35 per kWh while we pay only about $0.15 per kWh.