OPALCO gets green light for $38.4M low-interest loan

By Steve Wehrly, Journal reporter

The U.S. Department of Agriculture announced Oct. 11 that it had approved a $38.4 million loan to Orcas Power and Light Cooperative, including $24.3 million for smart grid technology.

Some of the loan will be used to build or improve 109 miles of distribution line and is part of a nationwide USDA Rural Utility Service loan and grant program that, according to USDA, "will enable rural electric cooperatives and utilities to adopt smart grid technologies in their operation."

OPALCO applied for the loan as part of the utility's 4-year capital construction plan, much of which is related to the proposed broadband initiative now under consideration. About $8 million of additional funding would be required to implement the broadband project.

Some smart grid technology is already in place, and OPALCO has installed fiber-optic cable to every electrical substation in its system. Using smart grid technology to make its distribution system more efficient and provide usage and related information to electricity distribution managers has been a goal of private and public utilities for several years.

The proposed broadband initiative now under consideration by the cooperative would extend smart grid technology and high-speed internet to most of the cooperative's member customers, as well as provide expanded and improved cellular telephone and emergency communications services throughout the islands.

According to OPALCO spokeswoman Suzanne Olsen, the co-op won't actually draw down the funds until the its board of directors decides to proceed with its broadband initiative, and then completes some of the construction. The loans are also contingent on OPALCO meeting "due diligence" requirements contained in the terms of the loan agreement, some of which have already been met, Olsen said.

If the broadband project is not approved by the OPALCO board, the money will not be lost, Olson noted, but a whole new package of documentation will have to be provided to USDA to redirect the money to other projects.

The OPALCO monthly board meeting, scheduled for Friday, Oct. 19, in Friday Harbor will discuss the business plan for the broadband initiative, with a decision expected by the end of the year.



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