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Power & Fiber: Combining Power Utility Communications with Profitability for the Future

Nov. 6, 2023
Today, a lot of electric co-ops and some smaller munis are putting in fiber and broadband simply because they are often in rural areas where nobody is building broadband to serve those people.

The transition to fiber is inevitable. Low latency and high-capacity data communications are essential for grid modernization and low-cost Passive Optical Networks (PONs) are a suitable solution to reach the growing number of devices across the distribution grid needed for efficient control. These include renewables and DER, SCADA, AMI, and IOT possibilities. This new smart grid also creates a potential pathway for gigabyte-level broadband solutions.

Today, a lot of electric co-ops and some smaller munis are putting in fiber and broadband simply because they are often in rural areas where nobody is building broadband to serve those people. The IOUs are doing it too, but they are usually building fiber to communicate with critical infrastructure like substations, or specific devices like recloser/interrupters in order to make the grid more efficient, returning the value to themselves, thereby justifying the expense.

The key point is that power distribution companies understand the value of fiber deploying ever-deeper into the distribution grid: a high-speed and high-bandwidth network capable of meeting communications requirements for the foreseeable future. When this network stretches to the meter, additional benefits will emerge like broadband revenue or future control capabilities (IOT and V2X).

Under/unserved Broadband Regions

FiberRise market studies have shown that electric utilities are more trusted by their customer base compared to the customer confidence level in cable TV and data companies. Even when competing against companies that have fiber already in place, electric utilities often win. Many customers say they would switch if they could buy from their electric utility. This is especially true in rural areas.

FiberRise designs fiber networks for our electric distribution customers so the substations are redundantly connected with fiber, then we design the PON to follow the primary line to the secondary and attach to the home/meter location, meaning the fiber will pass current and future locations for grid modernization devices. PON networks use approximately 70% less fiber than Point to Point networks and electronics costs are significantly less. FiberRise designs use specific wavelengths for utility operations, different than those used for broadband delivery.

Fiber: The New Player

Fiber project profitability/success rates

Density of the population determines the success of broadband projects for rural co-ops and justifies the process of grid modernization. This is the question of whether there are enough customers to buy the service to ensure a return on investment to the electric company. Usually, broadband becomes viable at a density of around six to seven people per square mile, unless significant grants are applied.

In a low-density town, there are too few people affected by power outages to necessitate putting in expensive systems to deal with it. When we do get to very rural communities, the utility has been finding it increasingly expensive to operate the electric grid. Developing additional broadband revenue can be the lifeline the rural co-ops have been looking for.

Additionally, gigabyte-level broadband can be a draw for new businesses, better community services, and improve the ability to work from home. For the low-density co-ops, the IOUs can be an ideal partner. Across America, many co-ops only service the rural areas outside of cities and towns (where IOUs serve). FiberRise has been successful in developing win/win relationships between IOUs who put in fiber to connect key locations with co-ops that lease access on these same lines to reach non-member locations in the dense city or town. IOUs gain a revenue source while adding community value. co-ops gain the needed density to make broadband projects viable.

Fiber’s Impact on Rural Communities

Electric utilities play a critical role in the future of community and population welfare. For rural co-ops and munis, the impetus to improve the quality of life via broadband capabilities is equal to, or greater than, services available in big cities.

Keith Carnahan, CEO of Meriwether Lewis Electric Cooperative, shared that it understands gigabit fiber is a lot bigger than social media, online shopping and entertainment for rural communities. "It is a game changer for economic development, education and healthcare. We know that fast, affordable, reliable broadband cannot get here fast enough for the rural areas. Helping rural communities build essential services is just another facet of what electric co-ops do by bringing a better way of life to those we serve."

Incentives

Better healthcare

Because of vastly improved streaming rates, fiber optic internet allows many cities and towns to have access to telehealth for the first time. This means that elderly or disabled residents no longer need to travel two or three cities over to see a specialist doctor. Doctors can instead perform home health reviews, where they can examine patients with a high-resolution camera, make assessments and write and send prescriptions.

Improved quality of life

Those that are home bound are for the first time able to view and remotely participate in family, friend or world events that happen outside their home. Important events can be streamed live, video chats can be held spontaneously, and people can stay connected.

Better education

With fast, fiber optic internet, schools become equipped with the ability to conduct lessons online and reach children that may otherwise struggle to get into school. With effective access to the internet, a far more rich and interactive variety of lesson plans and educational games are made available to teachers and students. 

Community Revenue

Superfast fiber optic internet can serve as a base for a whole raft of remote work occupations and online business commerce can run from rural and remote locations. This means that locals do not necessarily have to leave their town, and new inhabitants are attracted to the area, increasing the desirability and wealth of the wider community.

One of our co-ops built a fiber network in North Alabama for a small town called Haleyville. One year into the pandemic, Haleyville was named number 41 on the list of best ‘work from home’ small towns in America because the average home cost was $58,000, and you could get a gigabit of bandwidth for under a hundred dollars. The impact on a community is drastic. Young people can stay in their hometowns and set up and run businesses. Or younger family members can come home and visit for extended periods because their devices will work. Existing businesses can take contactless credit card payments, instead of relying on cash. Having a modern rural community gives people a choice on where they would like to live, instead of being restricted to where they must live for work.

Ronny Rowland, Retired GM, Prentiss County Electric Power Association, said, “We serve vibrant communities in Prentiss County Electric’s service area with some of the state’s best primary and secondary schools, a local community college and a diverse industrial community. It is important that we continue to grow our retail, education, and industrial base to allow our families to earn a good living in Northeast Mississippi with many unfulfilled local and work-from-home job opportunities. Our communities offer an overall excellent quality of life with low crime rate, many sports activities, along with great hunting and fishing opportunities. Having a robust fiber broadband infrastructure is vital to sustain and help our rural Mississippi communities grow by providing ultra-highspeed connections to the rest of the world.”

The Push for Fiber

We are at the convergence of two dramatic needs at the same time: the demand for more bandwidth and the need to minimize electricity usage on the grid. Many of the solutions have not even been invented yet. The electric grid is going to change dramatically over the next 30 years. That is why you see such a large amount of government money flowing towards resiliency, weather strengthening, etc., but before any of it can happen, you need to collect the data and be able to see where the issues are and how we can move the right resources into the right places.

If utilizing fiber for broadband in addition to utility use, the utility has additional income to pour into electric operations, which can be something as simple as improved light poles, or something more complex such as incorporating other types of energy generation. Fiber optic cable has the capability to respond within milliseconds.

The Electric Power Board of Chattanooga installed 1100 fiber optic switches all over the city of Chattanooga. As a result, in 2012, when a storm rolled through the area, the grid was almost one hundred percent back up in less than 12 hours. After the event, they had saved approximately $5 million in truck rolls to manually flip switches. In just one storm, the community saved $19 million just by not losing power.

Power provides a strong, steady backing to fiber’s high upfront investment, which creates a funding ecosystem for a community to have its electric grid launched into the future. Utilities can use the profit made from a broadband business to keep electricity bills low and stable. While things like oil prices and environmental disasters are unpredictable, fiber profits can provide a ‘cushion’ to keep the utility highly functioning to the community’s benefit.

Steve Maederer is vice president of Sales for FiberRise – an ENTRUST Solutions Company, supporting power utilities to build fiber optic networks for grid modernization and broadband revenue opportunities. Steve has a wealth of experience and expertise in the power utility industry. He leads FiberRise’s sales efforts to the power utility market for power cooperatives, municipalities, and investor-owned utilities. He specifically focuses on the development of fiber optic network solutions for Fiber To The Home (FTTH), grid modernization, and various telecommunications revenue opportunities.

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