What will it take for broadband over power line (BPL) technology to take hold? Is BPL on track to become, as the National Association of Regulatory Utility Commissioners (NARUC) once contemplated, the “third broadband pipe into residential consumers’ homes, providing significant competition for cable and DSL service,” and an integral part of the 21st century “smart grid”?
Initial rollouts of BPL have slowed, if not stalled, but utilities continue to explore the possibilities for providing new services to customers. Now NARUC, in its Report of the Broadband Over Power Lines Task Force, and an accompanying survey conducted by EPRI Solutions, explores several utilities’ responses to BPL, as well as the attraction to, and hindrances toward, implementing the technology.
The EPRI survey comprised responses from six utilities—Cinergy, Consumers Energy, South Central Indiana REMC, Con Edison, Central Hudson Gas & Electric, and First Energy—in determining to what extent each company’s unique culture and leadership affected its perspective on BPL. Overall, the study says, the utilities industry has been slow off the mark.
Commercial deployment of the technology has focused both on commercial broadband applications, which many utilities view as outside of their comfort zones, and utility applications that include automated meter reading, demand-response programs, and outage management.
“Some utilities are simply more willing than others to be technology pioneers, and this often stems from the philosophy of their CEO,” the report says. “Even the most aggressive utilities, however, are risk intolerant compared with other industries.”
Characteristics common to the most enthusiastic backers of BPL are a compact service territory, an existing fiber network, “significant potential” for growth in broadband service, and previous success in other service offerings. “Many electric utilities have tried offering non-commodity (and even non-energy) services in the past with mixed results,” the report says. “Those that have had more success (or at least fewer expensive failures) are likely to be more willing to consider a commercial BPL deployment.”
Municipalities—including the city of Manassas, Va., and Flatonia, Texas—have been among the most eager early adopters of BPL, while the city of Princeton, Ill., has put its BPL rollout on hold because of changing ownership at its equipment supplier.
Results were mixed for two IOUs attempting to get into commercial broadband. PPL Corp. subsidiary, PPL Telecom, pulled its BPL offering last year, citing the high costs associated with the new technology in relation to DSL and cable offerings from other operators. But Cinergy’s Current Broadband service was to have approximately 50,000 customers last year— or 20 percent of its more than 250,000 homes to which the service is available. Despite the lack of updated stats for the program, the study notes that Current Broadband received $100 million in financing over the summer from existing and new investors, such as Google and Goldman Sachs.
The self-regulating nature of municipalities is one of the chief reasons for advances in BPL deployment in Manassas and Flatonia, but regulatory obstacles don’t top the list of obstructions for the six utilities surveyed.
“Although they acknowledge that regulatory support is important to BPL implementation, all of the utilities we spoke with felt that regulatory concerns pale in comparison with issues of technology performance and business strategy when formulating a BPL plan,” the report says.
In addition, rather than raising new impediments to broadband services, regulators are eager to roll out the service to rural areas, and to build up a third alternative (in addition to DSL and cable) for the delivery of broadband.
After the many natural disasters last year, and with the continuing threat of terrorist attacks, regulators also see “the potential for BPL to enable a more flexible, self-healing power transmission and distribution grid,” the report says.
The use of BPL for internal utility applications to bolster the grid has delivered mixed results, at best, in terms of cost and benefits. According to an EPRI report still being finalized, BPL’s “smart grid” applications rank near the bottom of the list of eight other competing technologies. Based on 11 separate criteria, “BPL ranked eighth out of the nine [wide-area network] technologies considered,” pulling “particularly low marks on standardization and use of object modeling.”
Also proving problematic for BPL deployment: higher deployment costs, and the potential service disruptions during power outages or any other time there’s a lack of electrical current across the power line.
The report adds one caveat, however. “Several of the criteria used in this rating are tied to the current state of technology maturation, which accounts for some of BPL’s low ranking.”
Fundamental questions about the technology itself linger for larger utilities. First Energy “commented that it is still not clear that BPL technologies live up to their hype,” while Con Edison cited “credibility issues” with BPL. Even Cinergy acknowledged a “significant problem” in integrating BPL with electricity meters. Nevertheless, the company “believes that by installing BPL for current utility applications (even if another technology could perform equally well) utilities gain the advantage of extra bandwidth that will be useful in the future for more advanced utility applications (such as Intelligrid or Smart Grid applications).”
But beyond any problems inherent in BPL techology itself is the institutional risk aversion on the part of the industry. The study cites an internal evaluation of BPL by Central Hudson, which led the company to conclude that it was too early to begin testing the technology. “The key reason cited was that there are not yet enough utilities (especially smaller, investor-owned utilities) actively involved in the market,” the report says.
Other utilities may be too limited in their thinking about BPL’s potential beyond traditional utility applications. The report concludes that a utility’s “comfort level with moving beyond their core business appears to be an issue.”