Letter to Editor: OPALCO Candidate Speaks Out

— from Steve Hudson —

I’m a candidate by petition for the OPALCO board. I’m writing to state my concerns about what our co-op is doing, and especially how it is being done.

OPALCO is owned by its 13,000+ customer/members. We elect a board of 7 to represent the members’ best interest, and prudently run the co-op. The board is subordinate to the owners. If the lights stay on, most customer/member/owners, including me until recently, tend to assume our co-op is doing fine.

OPALCO has a proud history as a stable well run electric co-op. Broadband is like the electricity business only in that it requires transmission, distribution, and delivery. The electric business is non-competitive and relatively stable technologically. Broadband is very competitive and rapidly evolving high technology. Co-ops are not for profit entities.

A year or two ago, OPALCO proposed a $30+ million expansion of its broadband program, and polled its members to see how many would support their plan. 93% of us members said no by not saying yes. The board backed off this proposal, and seemed willing to grow at a slower pace. Then Centurylinks submarine cable failed last fall and things changed. The board decided to accelerate broadband expansion.

In the last couple months, I’ve spent many hours trying to understand what OPALCO is doing in broadband. I’ve read the boards proposed by-law and policy changes. I’ve spoken at length with board members, former board members, employees, competitors, and people close to the situation with years of involvement and insight. It’s puzzling and complex. I’m trying to be brief, but please consider the following:

1. By-law and policy changes listed as “action” items on the boards February agenda would have severely reduced the members ability to initiate changes. Under the guise of the board “speaking with one voice”, board members who disagree are essentially gagged, and subject to being removed by other board members if they speak their minds publicly. At that February board meeting, several customer/owners spoke against these proposals because they reduced member rights and silenced the diverse thinking that is healthy. The proposals were “tabled”, but their content and intent speak volumes about this boards transparency and respect for the members they work for. Tabling the proposals was a tactical move. Public debate about board transparency and reduced member rights just prior to the election of 2 directors wouldn’t be helpful if you want to pack the board with people of the same mindset.

2. A few years ago, one of two redundant submarine transmission cables from Lopez to San Juan was scheduled to be replace in the next 10 years or so at a cost of $3.3 million. The board president told me it is now scheduled for 2015 at a cost of $15 million. I asked how the cost could be so much higher. Was there other work contained in this budget item? No, he said. There’s nothing else in it. The cost increase is from the rise in copper and permitting costs. Coincidentally this cable route does not now have fiber. It is OPALCO’s weakest broadband link. Is this enormous expense for the needs of the electric grid or to get that fiber in place?

3. The board has provided no financial prospectus to clarify what they are doing in broadband.There’s no rate structure in place to project revenue. It’s not clear what is being spent, and no way to tell if this massive commitment of your money will pay off, or if the electric ratepayer must foot the bill through more rate increases. The board president, however, insists that the cost of broadband infrastructure along transmission and distribution routes is used for the electric grid anyway, so broadband customers need only to be charged for what is built to connect them. This has at least two dubious consequences: electric ratepayers subsidize broadband ratepayers; and competitors like our local internet service providers are seriously, if not fatally, disadvantaged.

4. This board is not just changing policies, by-laws, and mission statements to justify and control its apparent broadband plans. It is using threats and intimidation to silence its critics and debate in general. You may have seen Randy Cornelius’ letter criticizing Bob Jarman’s concerns, stated in his letter withdrawing as a candidate. Bob was incorrect in assuming the board passed the policy change muzzling board members, but he was correct in the essence of his concern. As mentioned above, the policy was on the “action” items list of the boards February agenda, and tabled only after encountering opposition from members attending that meeting. This board has a growing reputation for using executive sessions and unannounced meetings to obscure its activities. In addition to Cornelius’ public reply to Jarman, Bob also got a letter from OPALCO’s lawyers containing much identical language. This letter also contained the threat. Really? The board is using our money for lawyers to threaten suit to silence the debate the members need and richly deserve. it’s probably safe to assume this unattractive tactic is used on others like employees, directors and former directors. Maybe I’m next.

5. OPALCO’s town hall meeting in Friday Harbor last week was a disappointment to say the least. Lots of slick graphics, positive slogans, and board charm. But on broadband there was very little of substance. The question of board transparency, which seems to arise only in relation to broadband, was brushed aside until the broadband item on their agenda, which came last. Meaningful debate was just emerging when time ran out. Got to catch that ferry. Board transparency was never discussed.

6. OPALCO resources applied to advancing broadband are not available for electric operations. Not just money, but management and board time and attention, engineering, consultants, contractors, crew time and administrative help, all add to the unknown and growing cost. There are many, many miles of deteriorated buried electric cable to be replaced. The older design with exposed neutral conductor becomes unreliable. Electricity goes where it can. Safety and reliability are degraded.

There is more to indicate something is badly amiss. Large scale broadband expansion fundamentally redefines what our co-op is and does. It should be done only after rigorous evaluation and open debate; and only with solid approval by the members who must pay the bill.

I urge the press to do their readers the service of seriously examining this situation. I urge the members to do some homework and vote their ballots. I urge the board, and especially the individual board members, to rethink their respective positions. Your policies speak of high ethical standards. Are you in compliance with the spirit of those policies?

OPALCO should use its surplus fiber capacity to haul broadband for other providers. I don’t think it should be in the retail internet or phone business. The people currently on the board are obviously intelligent, successful, and capable. Maybe they’re a little blinded by the dazzling promise of broadband and pressure from “true believers”, but that end has not been shown to be wise, and does not justify these means.