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Broadband puts co-op on shaky ground | Opinion
By Dwight Lewis & Jerry Gonce
Many of us in San Juan County know that OPALCO’s Board of Directors is considering providing broadband service to its customers. But how many know what the cost of doing so might be?
It has been said that OPALCO currently has assets of around $49 million and an indebtedness of around $14 million. The estimated cost for the broadband project is around $35 million. Adding an interest cost of $10 million, the members will find that as owner/members of the cooperative, they will have an obligation of indebtedness of almost $60 million dollars.
The OPALCO Broadband Study dated Jan. 18, 2013 sets forth the board’s financial plan for building the new system and providing service to approximately 90 percent of the cooperative’s owner/members. In it, the board acknowledges that “A telecommunication system such as this will be very expensive to build and operate”. They further stated that, “To generate the revenues required to offset the expense, a major portion of the membership must subsidize the creation of the system, and a large number of members must subscribe to the broadband service”.
The board estimates that a subscription to the broadband service will cost about $75 per month. That is, if at least half of the 11,000-plus owner/members subscribe.
However, they also estimate that it will require a $15 month “cooperative infrastructure” fee paid by all owner/members to build the system, provide ongoing maintenance and fund future upgrades. So, if an owner/member subscribes, it will cost them at least $90 month. A non-subscriber will be required to pay $15 month.
Even though the board has not, as yet, made a decision to actually embark on the broadband project they have spent considerable money getting advice from legal counsel, consultants and others. And, they continue to solicit members with newspaper ads to “sign up now” as a show of support for the proposed broadband service.
We have grave concerns that the board may unilaterally embark on a project that is very costly and is fraught with many problems. We are concerned that such a project could, if it fails, put all of us as owner/members in financial jeopardy.
We believe that the power grid should be improved with more “under-grounding”, throughout the county, before considering a broadband project. Most important, however, we believe that it is time for the board to determine the level of support for broadband service by putting the matter before the owner/members for a “super majority” vote.
— Editor’s note: Dwight Lewis and Jerry Gonce are candidates in OPALCO’s District 3 board of directors election