Power Utilities Turn to Broadband for Additional Revenue

October 4, 2018

Author: Billy Wise, Senior Design Engineer/Manager of Telecom

As the world advances, many rural electric utilities are experiencing a reduction in load.  This reduction can be attributed to the new electrical efficacies, or, just a simple loss of metered customers.  How can this loss of meters be combated?  One of the simplest antidotes is for rural electric utilities to use broadband solutions to sustain customer and manufacturer needs.  A key indicator of this is the draw of the American workforce to work from home and, therefore, moving to areas with broadband concentration.  These same areas of broadband are witnessing growth in meters, while rural areas with a lack of broadband experience loss.  In an article published in February 2017, The New York Times stated that, according to a survey of more than 15,000 adults, “Last year, 43 percent of employed Americans said they spent at least some time working remotely.”

An additional source of load reduction is attributed to loss of manufacturing.  No longer is manufacturing a centralized plant with on-site engineering.  In many cases, the engineering is outsourced or moved to an area with enhanced resources. These resources stem from broadband and allow for engineering, manufacturing, and digital commerce to work as if all were in a centralized location.  Additionally, the speed of broadband enables manufacturers to be fluid and reactive to market trends.  It is becoming more prevalent that, without broadband, power utilities will lose metered customers and manufacturers.

What facts should be recognized when discussing broadband?  First and foremost, we know that the margin on broadband is higher than the margin on resale of power—the average margin on resale of power is 10 to 15 percent; the average margin on broadband can be as high as 75 percent! In many cases, utilities are building fiber optics for SCADA, distributed automation, and security.  These same fiber optics can be utilized to provide broadband services and help the electric utility gain efficacies (power curve, FDIR).  Every state has different legislation to govern power utility; however, this state-by-state legislation is also changing to allow power utilities to provide broadband services.  With the right-of-way infrastructure, it makes sense that a very effective deployment of broadband can be achieved through power utilities.

There are a few common misconceptions utilities may have when establishing a fiber network.  The most common mistake is only building enough fiber optic strands for today’s needs.  Fiber optic cable has a lifespan of more than 30 years, so it is recommended to implement a high fiber-strand count in order to be more “future proof”.  The second is the misconception that the cost to deploy fiber increases proportionately to the fiber strand count.  In most deployments, hardware and labor costs remain almost constant up to 288 fiber strands.  And lastly, some mistakingly buy into the “wireless hype”.  One should take note that fiber optics are necessary to feed wireless broadband.  It is true that wireless capacity is increasing, but at the same time, the range is decreasing and requires more fiber to compensate.

How can you determine which broadband consultant to hire?  When moving toward broadband, there are numerous consultants in the market; that list shrinks substantially when you look at consultants who come highly recommended.  Keep in mind that many of these consultants may not have technical expertise for every part of the project.  For example, some have OSP experience but little IT experience, or vice versa.

Gresco Technology Solutions can provide sourcing for materials and training for engineering and staking.  We also have IT training and design expertise and can assist you in finding a consultant and/or construction contractor to use.  For a successful broadband deployment, OSP and IT must work together to provide the best solution.

Please contact Gresco Technology Solutions at [email protected] or 478-315-0810 to learn more about our services.