"Back-to-basics" strategies challenge enterprise-risk philosophies.
Nearly a year ago, cover story announced the rise of the chief risk officer (CRO). "Utility...
IT Roundtable: The Digitized Grid
end of the dog. They are out on the edge of the system. What happens in New York City doesn't affect them much, and vice versa.
The only exceptions are in regions like North Carolina, where you have a single wholesale supplier that serves all of the co-ops. There's a level of coordination that can occur there, and the same in Michigan, Georgia, and Basin's territory (from Montana and the Dakotas to New Mexico). But even there, co-ops take their power on the edge of the system.
Fortnightly: There's a lot of talk about broadband-over-power-line (BPL) services. Are co-ops considering that, as a way to offer more services to customers?
Collier: They are all super interested in BPL, because they realize rural consumers aren't getting broadband and there is a need for it. Some co-ops are comfortable being that entity. The other 800 are interested, but they aren't sure how they'd deal with it. We don't have experience with communications deployment, and co-ops generally aren't the first to do anything. They want to use stuff that they know works.
The other issue is that BPL is not ready for prime time, and it is not well suited to sparsely populated areas.
As a general point, utilities have not done well in diversified business ventures. It's a funny story that they aren't good at running things like ISPs, but they are very interested in BPL. They seem to think BPL will run itself.
Fortnightly: I thought co-ops were famous for providing diversified services.
Collier: Yes, a small group of co-ops, about 150, are providing non-core services, like propane, HVAC and DirecTV. Some do well at it. Also, we have several members who have built out broadband across their service areas because they believe rural areas need Internet access just like they did electricity. Columbia [Rural Electric Association, in Dayton, Wash.] did it with wireless, because they had a vision of the future. But that's pretty unusual.
The great majority of electric co-ops have not had good luck with non-core services. Most are in the same mode that IOUs are in. Their banks and national trade association are saying, "Stick to your knitting. We beat back the deregulatory demon and we don't have to deal with it, so there's no pressure to do new stuff. Most of those who did are in trouble, so let's avoid telecom altogether."
But there are two camps. One is comfortable with offering non-core services, and the other is allergic to it.
Fortnightly: Some co-ops have been selling satellite TV and broadband, and that's largely a modular type of service they can re-sell. Do you expect more of that?
Collier: Yes. In fact, we have a project called Wild Blue, in partnership with Intelsat and others, that would bring entry-level broadband out to rural areas where you don't see DSL or cable because the population density is too low. NRTC made a $30 million investment over a year ago, along with Liberty and Intelsat, to take control of Wild Blue. That allowed us to give our members the opportunity