Islands' Sounder


Questions for OPALCO | Letter

September 26, 2013 · Updated 12:33 PM

Two little known facts about OPALCO’s “Broadband Vision” are:

1) OPALCO has approved over $5 million for “backbone” network investments, including $3 million already spent in infrastructure, $1.2 million on broadband studies, and a significant chunk to procure 700 MHz frequency.

2) The board voted that these “backbone” costs are to be underwritten 100 percent by members through electricity rates, instead of being partially recovered from Century Link, ISPs and broadband users through lease or network fees.

Five million dollars amounts to roughly a 2.9 percent “tax” on the entire OPALCO membership assuming these costs are paid over 10 years.

We want fast, reliable internet, too. But we have questions and concerns. Are we happy about our electricity rates being “padded” to subsidize broadband and cellular users? Specifically, are each of the “backbone” network investments justifiable as an improvement in the electrical system? Or do some investments (e.g. procurement of the 700 MHz frequency) make sense only if you count their non-electricity benefits – while making electricity users shoulder the costs? If some of these investments only are viable with a cross-subsidy, are we okay with that? If so, to what extent are we willing to cross-subsidize? Can OPALCO show a cost-benefit analysis to ensure our padded electricity costs do not exceed benefits to local economic development? And even then, we need to acknowledge equity issues: winners and losers are not necessarily the same.

Perhaps it’s wise to pause and re-think the board’s decision. Put the 700 MHz frequency procurement process on hold until its economic merit, without cross-subsidization, is evident.

We admire OPALCO’s sincere effort to facilitate local economic development. But broadband is not the only area where OPALCO can make a difference. Green energy, energy efficiency, green designs and construction are potential areas of investment and job creation with high economic, social and environmental returns (and a lot less risk compared to telecom). We wish to see OPALCO become a visionary leader on this front, leading and collaborating with the county and its members towards a dynamic, resilient future in its new chapter of the next 75 years.

Chom & Chris Greacen

Lopez Island


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