Saturday, April 12, 2014

OPALCO -- Part Of A Pattern?

OPALCO elections are occurring. We haven't covered or researched OPALCO as much as other local happenings, but candidate Steve Hudson seems to be making good points ... points that have the ring of truth to anyone who has watched county events generally ... secrecy, grandiose plans, financial profligacy, and strong-arm tactics. What's not to believe?

Have a look at a letter Steve wrote on March 25.
To the editor,

I'm a candidate by petition for the Opalco board. I'm writing to state my concerns about what our co-op is doing, and especially how it is being done.

Opalco is owned by its 13000+ customer/members. We elect a board of 7 to represent the members best interest, and prudently run the co-op. The board is subordinate to the owners. If the lights stay on, most customer/member/owners, including me until recently, tend to assume our co-op is doing fine.

Opalco has a proud history as a stable well run electric co-op. Broadband is like the electricity business only in that it requires transmission, distribution, and delivery. The electric business is non-competitive and relatively stable technologically. Broadband is very competitive and rapidly evolving high technology. Co-ops are not for profit entities.

A year or two ago, Opalco proposed a $30+ million expansion of its broadband program, and polled its members to see how many would support their plan. 93% of us members said no by not saying yes. The board backed off this proposal, and seemed willing to grow at a slower pace. Then Centurylinks submarine cable failed last fall and things changed. The board decided to accelerate broadband expansion.

In the last couple months, I've spent many hours trying to understand what Opalco is doing in broadband. I've read the boards proposed by-law and policy changes. I've spoken at length with board members, former board members, employees, competitors, and people close to the situation with years of involvement and insight. It's puzzling and complex. I'm trying to be brief, but please consider the following:

1. By-law and policy changes listed as "action" items on the boards February agenda would have severely reduced the members ability to initiate changes. Under the guise of the board "speaking with one voice", board members who disagree are essentially gagged, and subject to being removed by other board members if they speak their minds publicly. At that February board meeting, several customer/owners spoke against these proposals because they reduced member rights and silenced the diverse thinking that is healthy. The proposals were "tabled", but their content and intent speak volumes about this boards transparency and respect for the members they work for. Tabling the proposals was a tactical move. Public debate about board transparency and reduced member rights just prior to the election of 2 directors wouldn't be helpful if you want to pack the board with people of the same mindset.

2. A few years ago, one of 2 redundant submarine transmission cables from Lopez to San Juan was scheduled to be replace in the next 10 years or so at a cost of $3.3 million. The board president told me it is now scheduled for 2015 at a cost of $15 million. I asked how the cost could be so much higher. Was there other work contained in this budget item? No, he said. There's nothing else in it. The cost increase is from the rise in copper and permitting costs. Coincidentally this cable route does not now have fiber. It is Opalcos weakest broadband link. Is this enormous expense for the needs of the electric grid or to get that fiber in place?

3. The board has provided no financial prospectus to clarify what they are doing in broadband.There's no rate structure in place to project revenue. It's not clear what is being spent, and no way to tell if this massive commitment of your money will pay off, or if the electric ratepayer must foot the bill through more rate increases. The board president, however, insists that the cost of broadband infrastructure along transmission and distribution routes is used for the electric grid anyway, so broadband customers need only to be charged for what is built to connect them. This has at least two dubious consequences: electric ratepayers subsidize broadband ratepayers; and competitors like our local internet service providers are seriously, if not fatally, disadvantaged.

4. This board is not just changing policies, by-laws, and mission statements to justify and control its apparent broadband plans. It is using threats and intimidation to silence its critics and debate in general. You may have seen Randy Cornelius' letter criticizing Bob Jarman's concerns, stated in his letter withdrawing as a candidate. Bob was incorrect in assuming the board passed the policy change muzzling board members, but he was correct in the essence of his concern. As mentioned above, the policy was on the "action" items list of the boards February agenda, and tabled only after encountering opposition from members attending that meeting. This board has a growing reputation for using executive sessions and unannounced meetings to obscure its activities. In addition to Cornelius' public reply to Jarman, Bob also got a letter from Opalcos lawyers containing much identical language. This letter also contained the threat. Really? The board is using our money for lawyers to threaten suit to silence the debate the members need and richly deserve. it's probably safe to assume this unattractive tactic is used on others like employees, directors and former directors. Maybe I'm next.

5. Opalcos town hall meeting in Friday Harbor last week was a disappointment to say the least. Lots of slick graphics, positive slogans, and board charm. But on broadband there was very little of substance. The question of board transparency, which seems to arise only in relation to broadband, was brushed aside until the broadband item on their agenda, which came last. Meaningful debate was just emerging when time ran out. Got to catch that ferry. Board transparency was never discussed.

6. Opalco resources applied to advancing broadband are not available for electric operations. Not just money, but management and board time and attention, engineering, consultants, contractors, crew time and administrative help, all add to the unknown and growing cost. There are many, many miles of deteriorated buried electric cable to be replaced. The older design with exposed neutral conductor becomes unreliable. Electricity goes where it can. Safety and reliability are degraded.

There is more to indicate something is badly amiss. Large scale broadband expansion fundamentally redefines what our co-op is and does. It should be done only after rigorous evaluation and open debate; and only with solid approval by the members who must pay the bill.

I urge the press to do their readers the service of seriously examining this situation. I urge the members to do some homework and vote their ballots. I urge the board, and especially the individual board members, to rethink their respective positions. Your policies speak of high ethical standards. Are you in compliance with the spirit of those policies?

Opalco should use its surplus fiber capacity to haul broadband for other providers. I don't htink it should be in the retail internet or phone business. The people currently on the board are obviously intelligent, successful, and capable. Maybe they're a little blinded by the dazzling promise of broadband and pressure from "true believers", but that end has not been shown to be wise, and does not justify these means.

My candidates statement/bio as submitted to Opalco is attached FYI.

Sincerely,

Steve Hudson
Friday Harbor

30 comments:

  1. TH should post OPALCO's response. Mr. Hudson is on to something and he needs our support to crack open the behind to scenes workings that affect all of us.

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  2. Also look into OPALCO deciding they wouldn't let Mike Greene run for the positions. That smells so rotten. The claim of "conflict of interest" just seemed a bit Dorfed-up.

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  3. This Letter to the Editor posted on Orcas Issues from Mark E. Madsen, San Juan Island has some valid points. http://orcasissues.com/letter-editor-support-opalco-board-broadband
    I think there is more to learn and I know the Trojan Heron is where I will become educated.

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  4. There are a lot of examples in the United States, Canada and other country of local/regional coops or privately owned independent rural phone companies successfully providing high speed broadband at competitive prices as a value added financially sustainable business unit.

    A utility coop is just as well provisioned to push photons out to customers as it is provisioned to push electrons. The physics involved are hardly relevant.

    OPALCO does have an internal reputation of being a bit old fashioned at time, there is moss growing around the edges. It was not so long ago that the average age of board members was 80 something.

    A reaction to close doors and pull up the draw bridges is not too surprising, but it is time for OPALCO to get hosed out and let the sunshine disinfect, as it is time for the County and school boards to get a good scrubbing.

    That has nothing to do with the technology, OPALCO's basic capacity to provide it or obvious public demand for alternatives to Century Link.

    It is an institutional problem. An ingown toenail if you will. It grows from 70 years as a monopoly if you think about it. OPALCO is not exactly a "marketing" organization.

    This is about a need for re-organization, the tech and demand for it is not the issue.

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  5. I think Hudson's comments are way off base. I went to the OPALCO website to see what I could find. Under Finances, 2014 Budget, it is pretty well spelled out what they are spending money on. The submarine cable thing is explained, as far as I could understand. Hudson says there is some big expensive thing that the ratepayers are getting socked for, but I didn't see it in the numbers.
    At least they're trying to do something about this crap CenturyLink peddles as Internet. For over a decade, people have complained about slow connections and louse cell coverage. Theses guys try a plan and get crapped on. Plan gets scrapped. CL cable goes kablooey and everybody screams Save Us. So they come back with a go- slow lower cost idea, and the same crap piling happens. Who the hell is gonna do something. The clown Jarman was going to run for the Board. Great, electric company just like county! Maybe OPALCO is slow, but the lights stay on pretty good.

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  6. Another example of mission creep is the Orcas FD holding meetings and planning about basic health care. Um, no wonder they want so much money.
    Here we thought they were here for emergencies.

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  7. OPALCO does do a good job, and I can't let any snide comments go by about the old (average age 80+) of past long time board members. This COOP is really good because of those people! They loved it. It was their baby. (I called once and a board member answered the phone; he not only knew about my transformer, he knew when it was going to be installed. AND the utility easement drawings were sent to me in just over a week!)

    Certainly Judge Hall is an exceptional person and I have no idea who is running against who given the total lack of basic journalism here, but it would seem this guy Hudson has some ideas and some complaints and would give the board more balance. "Part of a pattern" in my view would be that of an insider's club. IE: Orcas Fire, and most certainly, County Staff.

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  8. Got the OPALCO ballot mailing. Maybe I would not have voted for Steve Hudson, I will now.

    Who ever wonked this thing really went over the top. From incumbents front and first up to sticking petition candidates on the back pages, along with the typical cardinal sin of the ballot set-up.

    Colgate Palmolive could not have done it better.

    "Committee Nominees" on the left voting side, Steve Hudson parked FAR right with a withdrawn candidate.

    Any reason this guy Hudson is not included in the column on the left with a nota bene he is a petition candidate. I mean, big deal.

    Guess I'll keep my Colgate, at least I can expect this crap from them at their annual meetings...and their tooth paste ain't bad.

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  9. Off-topic, but a heckuva story leading up to national Monument status:
    http://news-beacon-ireland.info/?p=17281

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  10. I got the feeling reading the ballot that they almost are encouraging you to vote early and vote often.

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  11. @6:40 PM

    No disrespect meant for the OPALCO board of days past, some of them like Nordine Jensen were/are pillars of the community. However some of those folks had served on the board for decades, that is a recipe for entrenchment and lack of innovation and it shows. That said, although OPALCO can tap oceans of low interest federal loans available to rural utility coops their philosophy had always been to "grow slow, pay as you go." That was key to preserving local control. Similar to the Town of Friday Harbor. I think the concerns I hear are that traditional business philosophy may be taking a back seat to the bandwidth program. Whether true or not, this is increasing public scrutiny, something the organizational culture of OPALCO isn't accustomed to and it is reacting a bit poorly to that. And the OPALCO ballot mailing shows what they are willing to do to "keep things under control" and it only raises cause for further concern unfortunately. They are beginning to lose sight of protecting local control, with maintaining board control against perceived external threats. Not a good sign.

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  12. Went to the candidate forum on Lopez yesterday. When the topic of Board compensation came up things seemed to get a little confusing. The incumbents did not seem to know how much compensation they received per meeting. I was shocked to learn that we pay for their health care. Glenna said that she did not take the health care compensation and Vince did to the tune of about $16,000 per year. Can anyone here tell me how many meetings per year the Board Members take and how much we pay for their healthcare, and is there any other compensation.

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  13. Firstly, IMHO the broadband issues is the most important issue we face as a community. It touches just about every part of the community, our economy, environment, culture, government, healthcare etc etc. It is this generations basic utility requirement if we want to partake in the modern world while controlling our own destiny.

    Now, Part of the Pattern? I am not so sure. I say that, not because of my opinions on so many of the other hot button issues, but because OP is in a bubble. They have managed to operate without much scrutiny for a very long time. Mainly because they do a good job. The organization is well run and they serve the client base in a very open and helpful manner, they hit all the state and fed utility targets as required with flying colours. I am looking forward to them taking the lead on the renewable side of things a little more but all in all it is hard to complain about them. The coop/monopoly model works in this regard, and thankfully the organization has from what I can tell never taken this position for granted.

    However, they have decided to jump into a very different pool, that is deep and dark. We like to think of telecommunications like other utilities. But no other utility has and continues to see change in the underlying delivery methods and client engagements that the telco world sees. It is a far more competitive world and should be compared more to the airline industry versus electric, water etc. Putting planes in the air probably hasn't change much over the years, but how you sell the service, win over customers, and maintain loyalty is always changing. This is now a space OP is put themselves in and I think we are seeing their inexperience and risk adverse cultural show up very early on.

    We face 3 major issues;

    1. Their DNA. OP is just not setup to compete. They are just not setup to deal with the fact that they can't keep everyone happy. They haven't had to collaborate and compete with the same entities in the past. The culture of the org needs a major shift if they legitimately want to add telco to the mix. How they market, communicate, how they serve clients, how learn to fight year after year to win customer loyalty is just not in their DNA. And so far they haven't displayed enough of a willingness to add folks to the org who are willing to take on this challenge. So clearly, if the org is going to change, the board needs to change. The dynamic needs to be very different. This is not because of past fault, it is just what they need to do going forward. Yes the average age needs to come way down, why, because they want to play a young persons game.

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  14. Part two:

    2. The topic. This stuff gets really boring in a heartbeat. Major turn off for many folks. There is also rarely a black and white solution to a problem. Lots of options exist in this field and trying to explain one over another is very hard. Requires top notch communication and a willingness to experiment in a creative manner. People need to touch and feel this stuff. OP need to do things without asking the permission of all. Doing so will show folks what is possible versus trying to explain it. They have the support. They just need the gumption to TRY things.

    3. The existing ISP's and OP desire to become an ISP. Someone alluded to the Mike Greene issues with his nomination for the board. Fully agreed. Why he has not got a solid seat at this table is beyond me. No one else has a much experience in this space, in this community. Not to say there aren't others who understand the technology etc, but delivering the service in this community for 20 years and doing it well is worth its weight in gold. He may well be to blame for some part of the poor relationship but there is no way this will work if we don't have OP and Rock Is. on the same page... Hate to put a target on his back but is what it is.

    In general I do not get why OP are so hell bent on becoming an ISP. However, if they want to do it, they should set up two very distinct entities within the Telco org. One wholesale division and one retail division. The OP retail (ISP) buys access from the wholesale side at the same price as any other ISP will. This needs to be open and transparent to the community. If this is done correctly, it is game on for all ISP's to compete and win the business they deserve. But if OP have a shred of a leg up on other ISP's this gets real messy real fast. All of a sudden the message of helping the community when folks are loosing their jobs gets lost. Again, this is why they need to learn to collaborate and compete at the same time. Very hard to do given the position and culture of the existing org.

    If we want real Broadband, OP has to be part of the solution. They have way too much infrastructure in place and more on the way. Beyond stupid if we as a community don't figure out a why to benefit from this. However, they need to major cultural shift if they want this to work. And it is going to require real leadership to do....

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  15. Did we know this 4 years ago?

    http://cofarmbureaublog.wordpress.com/2010/03/04/leaked-memo-uncovers-administration-land-grab/

    http://www.washingtontimes.com/news/2010/mar/02/white-house-land-grab/?page=1

    We were one of 14 areas listed in this leaked "Internal Draft-Not for Release" document

    http://cofarmbureaublog.files.wordpress.com/2010/03/states_for_designation.pdf

    Sorry for the distraction, I feel kinda had.

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  16. Notice in the document it was apparently ALL of the San Juan Islands…

    "San Juan Islands, WA
    This cluster of hundreds of islands along the Nation's northern border contains a wealth of
    resources. The deep channels between islands and placid, reef-studded bays are home to myriad
    marine species and support major migratory routes for Orcas. The islands contain healthy pine
    and fir forests which protect a wide variety of wildlife species. The outstanding scenery and a
    historic lighthouse support diverse recreation opportunities. This area also supports sailing and
    sea kayaking opportunities that are unique in the Northwest."

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  17. Dear 7:35, got any idea where this came from? It certainly has the FOSJ smell.

    On topic: Thanks to Mr. Lawlor. Excellent analysis; (such stuff, you will not find outside the TH.)

    I feel strongly that I really am very happy with OPALCO. Unfortunately, as we have seen with County Government, it does not take much for things to get completely out of hand. As Mr. Lawlor outlines the cards are on the table. What card will you pick?

    Me? I'm looking for someone without a rubber stamp.

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  18. Meanwhile Dr. J. Frank Parnell careens through the desert with radioactive aliens in the trunk.

    "Oh...you don't wanna look in there ..."

    Yes the National Monument is a hoax and abuse of trust and good faith of the highest order. Maybe more people are ready to hear that story, though the train has left that station.

    If you really want to know, ask Jaime Stephens. Ask about why the BLM held their "community meetings" in Anacortes on three days notice. No accident really that Google now has all local addresses showing up as being within the San Juan Islands National Monument. Read the quotes from the big feral gummint folks, we're such a great place for their 21st Century Conservation Agenda.

    Just snip a few words and what are you left with. Gag. Agenda 21. The War on Rural America. Why else do you think we're being entombed by the Critical Areas Ordinance?

    http://www.sanjuanjournal.com/news/139481188.html?mobile=true

    Anyway, in the midst of that hullabaloo is the stranded broadband asset of OPALCO. That needs to become part of an islander's agenda if there's any hope left for our communities and working families given what the Federalis and their Friends have in store for us.

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  19. New age manifest destiny pushed by politicians in both Washington's.
    Now we are under the purview of the BLM. Who do you think has more pull with them. Us, the friends and the coal/oil folks?
    A donation goes along way toward creating a distraction.
    Our reality has turned rather Rovian.

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  20. Does anyone have any thoughts about what impact the BLM/Monument management plan really will do? As far as I can tell, out of the 110 or so National Monuments, we're the only one where if the BLM wants to, they could extend "buffers" to protect the monument that would result in somebody losing their home or property. We're living in a big new "managed sustainability" experiment!

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  21. From national review.com -

    "When urban regions become dominant, rural regions increasingly serve urban ones and do so under comprehensive urban regulatory schemes that disrupt lives, destroy livelihoods, and lead to widespread frustration and despair.

    And all of it is legal.

    As government grows ever-larger, majority rule becomes more consequential for minority populations. The regulatory state grows, and rural Americans are left with little recourse. The courts won’t overturn regulatory actions absent a clearly-identified liberty interest (with the law granting wide discretion to federal agencies), in many states legislatures are dominated by urban voting blocs, and — particularly in the West — massive federal ownership of land means the voice of the local farmer or landowner is diluted into meaninglessness within the larger national debate."

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  22. Please keep it on topic...

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  23. Off topic (sorry), but Hector Cyr's letter in today's Island Guardian deserves follow-up discussion among the TH faithful. Very interesting explanation of how local hobby farm types game the system and transfer a disproportionate property tax burden to the rest of us. Not a fair situation, but one apparently supported by both past and present County Councils.

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  24. @ 10:17 AM

    Understand, but think it is also important to keep the larger picture in view, and the context of the OPALCO opportunity has to be understood as one of the local battles we are now fighting in the larger war on rural America. And make no mistake, there are powerful interests that do not want OPALCO to proceed with the bandwidth program. And those are the same powerful interest that want humanity off the islands, humanity off rural lands, that seek to destroy the rural lifestyle that we grew up and cherish. And there probably elements on the current OPALCO board that quietly do everything they can to throw sand in the gears, and there may be candidates for the board who are similarly inclined. Watch out for them. They think they what's best for you. They do not.

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  25. @11:50 AM.

    I appreciate what you saying. That's the premise for this entire blog. I just have a hard time trying to engage a logical debate when folks are bouncing from Opalco conversations to conversations regarding BLM. This is a small community so it goes without saying there are a lot of the same folks involved in many of the same issues. But we have to tackle one at a time in this method of forum. I am interested in learning more about the Opalco situation prior to casting my votes. This topic took up a lot of air time last year but we are not hearing much about it at the moment when I feel we should be hearing more.

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  26. Ask candidates why you should vote for them. Call them at home in the early evening. Ask them how they would envision the islands in 5 years, 10 years and how OPALCO can help realize that vision, and then what skills does the candidate bring to the table? Most important, are they afraid of new business development? Are they afraid of of new working families moving here? Are they aware the population growth warnings did not happen and that population has leveled off or is even declining? Ask them how they would feel if the county population grew by 5,000 over the next ten years?

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  27. Anonymous. No, not that one, the other oneApril 17, 2014 at 1:30 PM

    @11:50 am said: "And make no mistake, there are powerful interests that do not want OPALCO to proceed with the bandwidth program. And those are the same powerful interest that want humanity off the islands, humanity off rural lands, that seek to destroy the rural lifestyle that we grew up and cherish."

    Part 1

    Agreed. Here's the thing: while the OPALCO board and OPALCO can undoubtedly do a better job communicating than they do (something they'll readily agree with if you ask them), the opponents of the current board are doing EVERYTHING in their power to appear to be reasonable, intelligent and sane. But.......many of them are not reasonable, not intelligent or not sane. Or some combination thereof. The candidates' forum this week on Lopez provided ample evidence.

    If you're throwing your lot in with the anti-broadband, anti OPALCO people, you'll need to keep in mind that your fellow travelers consist to at least some extent of flat-earthers and Luddites bent on taking San Juan county back to a pre-industrialized economy (at a minimum - arguably some want to take the county back to a pre-Cambrian economy). Getting rid of ferries so that we can rely on sail-powered transportation to and from the islands? Check. Getting rid of the acceptance of US currency in the county so that we can rely exclusively on barter? Check. Getting rid of police and courts? Check. Getting rid of the public school system to free the children from "the incarceration and isolation" of schools and free them up to participate in "political life"? Check. A return to heating and cooking exclusively with wood? Check. The seizing of "trophy homes" by the populace so that they can be "shared by groups of families or large extended families"? Check. Great company.

    There's a small, vocal minority that wants to turn back the clock on even a responsible use of technology. Sure, they'll give you 6,000 links to articles that supposedly prove their point. Of course, they've never read them and haven't even noticed that virtually all of them are behind paywalls. Cut and paste functions are so much easier when you don't bother to read the content. When you point out that their studies have largely been repudiated, they'll pause and then give you the same 6,000 links again. Three years ago, anti-cell phone, anti-wifi, anti-broadband Luddites proclaimed loudly that electrosmog was killing bees. Now that the cause has been found ((hint: it's not electrosmog), they've moved onto other arguments.

    That latest one is that people who want broadband only want it to download porn - sort of the slut-shaming of broadband. Of course, he can't/won't provide any evidence to support his assertion. Indeed, he hasn't organized any protests at the school or the library to remove broadband from those places - I'm shocked that he's not shocked that as a society we're apparently enabling elementary school children and public library users to enjoy porn at public expense. Or maybe he's just full of it - maybe it's not the board members who are the stooges.

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  28. Anonymous. No, not that one, the other oneApril 17, 2014 at 1:32 PM

    Part II:

    Here's what I'm looking for from the OPALCO board - some kind of long-term vision: what will the county be like in 50 years? How can the co-op provide the infrastructure for a sustainable first world economy (third world countries by and large have better cell phone service than SJC). I'm also looking for a board with the courage to understand that while we owe all the members a voice, we don't owe them a consensus. To the extent that the 11,000 members get sucked into the trope that we must achieve consensus, we'll all be held hostage by a tiny minority. They'll always have 10 more questions that must be answered before we can move forward. They'll insist that we must prove everything is safe in all circumstances (I wonder if those people realize we're resident on islands surrounded by a substance that is demonstrably unsafe in a number of circumstances - yet no one seems concerned about all that damn water). All of this is just a strategy to delay, confuse and obfuscate. We don't owe the uneducated, the willfully ignorant, the flat-eathers, the Luddites a promise that we will not move forward until they agree.

    Co-ops aren't like corporations, but the anti-OPALCO people want it to be like just one big family. OK, fair enough - when I was 15, if my parents had asked, I'd have chosen to spend the family money mostly on beer and sports cars. Fortunately for all, it turned out I didn't have a say.

    As I said, the board has an obligation to listen to members' viewpoints, but at some point, they need to, in the words of the philosopher Jimmy Buffett "breathe in, breathe out, move on."

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  29. SJC has a spectrum of anti-technology, anti-human types who range from the faux-pearl sophisticates at FOSJ to the true Kaczynski types who are only one link to another article on wifi-as-a-carcinogen from writing a manifesto, hoisting the black flag and dragging their well-thumbed copy of the Anarchists Cookbook off the shelf.

    Interesting to consider that they're all contemplating the same thing as the preppers on the shows that MSNBC loves to make fun of: the collapse of civilization as we know it. The difference is that the preppers fear it and the faux-pearl and Kaczynski types are hoping for it.

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  30. Another off topic comment, I know, but hopefully worthy. Check out the Seattle Times editorial of a couple days ago re the EPA's latest Clean Water Act gambit of using grossly inflated fish consumption data -- yes, fish consumption data, of all things--to justify proposing new, expensive and oppressive regs.

    (I am well aware, by the way, that off topic comments rankle some, and I don't mean to derail the current discussion. Is there a way, TH, to suggest possible new topics for future postings by separate email or some other means? If so, please advise. Thanks.)

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