Regardless of whether it winds up being a great idea for OPALCO to expand into telecommunications by building a wireless infrastructure to support cellular and broadband Internet in our county I believe that doing so is in direct violation of our utility's explicit articles of incorporation and purposes for existing.
Our co-op's articles of incorporation (find the most recent amended version here www.opalco.com/wp-content/uploads/2009/02/bylaws-12-11.pdf state, in part, that the primary objects and purposes of OPALCO are to create, purchase, or store, and distribute electric energy for its members.
There is nothing that indicates it should be getting involved in building a wireless network and fiber optic system to support cellular phone service and wireless broadband Internet access.
The overriding objects and purposes are summarized in legal form at Article IIa) and the other sub-clauses are in support of those primary purposes. Over a decade ago, OPALCO purchased leaseholds on the fiber optic bundles in the submarine cable BPA installed.
The publicly stated intent was to support its own network and to monitor its electrical distribution system.
Then they developed a headend to connect dark fibers to an ISP in Bellingham. Again, it was stated this was to support their internal operations.
Then somewhere along the line mission creep set in and OPALCO's board decided to get into providing broadband Internet to parties outside its own operations. They did this by taking some of those customers away from existing ISPs and broadband providers and getting into a market our co-op was not built for or intended to operate.
The latest expansion plan will significantly affect our co-op in the following ways:
1) The $18 million cost will double our debt burden within 1 or 2 years. This expansion of plant and equipment is primarily intended to create the infrastructure needed by cellular providers and wireless broadband. Neither of which has anything to do with OPALCO's primary purposes.
2) The plan represents at least a 36 percent increase in plant and equipment which will be accompanied by significant and ongoing increases in maintenance and labor costs. (based on our 2011 balance sheet)
Both of these burdens appear antithetical to the primary purposes of the co-op. Put plainly, it will increase the costs of supplying our members with electricity while the expenses will not produce a single Kilowatt of electricity. Actually, it is going to increase the electric energy demands on the system. All of which will likely increase the costs of providing us with electricity.
I want to be clear I believe the current board is well intentioned and I am grateful for so many great decisions our co-op boards have made over the decades.
Some of you may recall the WPPSS debacle where utilities like ours were forced to invest in the nuclear power expansion and our board pioneered a way for our utility and others to survive the burden of the failed debt that threatened our co-op's existence.
I also want to acknowledge that OPALCO has many excellent employees providing a superior quality of service and the co-op is well run in terms of its role as a provider of safe and reliable electric power.
The board wants to pull our co-op into a market that is not an essential service to its members, not essential like reliable electricity. I agree that broadband access is extremely important to our county, but there is a distortion wave created by the din of both frustrated and enthusiastic proponents wanting OPALCO to get them better broadband and cellular service.
This distortion wave overwhelms and does not encouraged a necessary discussion of the socioeconomic impact of the $18 million extra-curricular plans. OPALCO for all the greatness it has achieved for its members is essentially a beneficent monopoly.
It was born because private industry did not have the interest or capital to create the power grid we use today.
Some of the questions that should be discussed include:
a) Is it fair to force a surcharge on every meter onto those co-op members who cannot afford, or do not want, or will not physically be able to get, or already have a preferred broadband Internet or cellular service?
b) What percentage of members will actually use the OPALCO wireless broadband? 30 or 20 percent? Is it fair to force the many to pay for the non-essential needs of the few?
c) Can existing dead zones in emergency communications be addressed with wireless whip antennas installed on OPALCO's existing utility poles and isn't the County responsible for paying for it?
d) Do we need our monopoly-based utility getting into markets that have competitors in them now?
e) Will the eventual income from the extra-curricular wireless activities jeopardize our co-op's non-profit status?
f) Does broadband equate in simple terms to jobs or is it more complex and will more or better broadband reduce the unemployment level of those already living here? The Internet flattens and widens competition. The math is not simple as has been claimed by some.
g) Do rural areas need ubiquitous cellular coverage?
h) Do OPALCO's future Smart Grid improvements need towers or can they be added to our existing utility poles?
i) What will be the impact of all those towers on our rural countryside and will it adversely affect the quality of life and the beauty of what we have to offer to paying visitors.
j) Would the $18 million be better spent investing in the Smart Grid and working toward an era where we are a net producer of electricity rather than a net consumer?
Monopolies have ways of allocating resources where competitive markets would not. Now that OPALCO has helped our county usher in the era of the ubiquitous communication towers (County Council is eager to put the wireless ordinance into law June 26th) won't cellular service providers rush in to improve cell coverage if OPALCO does not?
If it makes financial sense they will. How many extra customers will they get with all those towers? 300, 500, 1000?
Will it make sense for them to build, maintain, and operate those towers with those numbers?
I acknowledge that the OPALCO board can solely alter and file with the state an amendment to its articles of incorporation to expand its objectives and purposes.
However, I believe that the planned activities are so fundamentally outside the coop's current explicit purposes and so financially significant that the full membership should vote for the expansion after being well informed and having access to a full and well prepared business plan. This is not a decision that should be left to just seven members of the co-op.
I think this is a topic that needs community discussion so I have created a forum for us to do so in a respectful manner. I believe broadband Internet is crucial to our county, but OPALCO's plan may be hugely flawed.
Please read and add to the discussion online at http://opalcowireless.boards.net.