Guest Post - OPALCO By-Law Change

Proportional Representation ... It's Time

OPALCO elections are upon us, and here is a guest post by Rob Thesman, the author of the OPALCO by-law change.

If you’re an OPALCO member, you’re being asked to vote up or down on a bylaw change contained in the ballots that are being distributed. While opponents are characterizing the bylaw change as “dangerous”, “unnecessary” and “irresponsible”, the truth is those people are simply trying to avoid fairness and balance on OPALCO board representation.

You only need to understand the numbers 2,432 and 345 to see the importance of making this change. The change itself is simple and straightforward, it’s two sentences: “At the end of the existing Article III – Directors, Section 1, General Powers, the following paragraph shall be inserted:

“As soon as practicable and at least once every ten years thereafter, the Board of Directors shall reapportion the number of directors seats attributable to each of the Districts listed in Article III – Directors, Section 2, Qualifications and Tenure, so as to align the representation of cooperative members as closely as possible with the actual number of energy members within each District. Furthermore, from time to time the Board of Directors shall update the boundaries of the above-referenced Districts so as to facilitate the goal of proportionate representation of the members in each of the Districts on the Board of Directors.”

That’s it – two sentences, directing the board to more fairly apportion the board seats. The separate districts covering San Juan, Orcas and Lopez islands each currently have two directors while the district covering Shaw currently has one director. Looking at the number of members in each of those districts, San Juan Island has one director for every 2,432 members. Orcas has one director for every 1,812 members. But look at Lopez – Lopez has one director for every 1,185 members. And Shaw has one director for every 345 members!

The current system of apportioning directors gives some members more and others less representation due merely to where they live. The proposed bylaw change simply requires that the board fairly apportion the number of directors in each district, and to update the boundaries of each district, as necessary to make the board representation better aligned with the physical location of the co-op members. This does not change the total number of directors.

At the end of the reapportionment, every member of OPALCO will be represented by a board director. The language of the proposed changed disenfranchises not one single member. Board seats will be reallocated and districts will be redrawn with the simple goal of having each board seat represent the same number of members.

Opponents of the proposed change should consider how they will look their fellow county residents in the eye and explain to them that members on certain islands are so wise or special that they should have a disproportionately higher representation on the board than others.

Opponents of the bylaw change argue that no re-apportionment is necessary because all members vote on all directors’ seats. While it’s accurate to say that we all vote on all board seats, the existing bylaws specifically contemplate that directors will “represent” a particular district – it’s a requirement contained in Article III, section 2. But on a more practical level, who do you think represents you more, the director you run into at the grocery store or the one from an island you never go to? Does every director have an obligation to look out for the entire co-op? Absolutely, but the idea of representing a particular district is so important that it’s enumerated as one of only three requirements to run for a seat on the board.

One of the opponents of the change calls it costly because it will require an independent auditor. This is completely false. There is no requirement in this two sentence change that this redistricting would need to be “audited” before or after implementation and to suggest that is, at best, disingenuous.

Another argument made against the change is the ridiculous statement that that this might require redistricting “every six months”. A plain reading of the proposed change requires that the board calculate whether reapportionment should be done “at least once every ten years” after the initial reapportionment is completed.

In the final analysis, this proposed bylaw change isn’t dangerous, irresponsible, costly or vague. It’s two sentences that attempt to create a more representative balance of members’ opinions on the co-op board. Could it be that the opponents of the proposed change are really against it just because it endangers the overrepresentation they’ve enjoyed in the past?

We members of the co-op exercise our governance in two ways – directly through voting at the annual meeting and indirectly through the actions taken by the directors chosen from each district. The governance exercised by the directors is far more important in the day-to-day and long-term policy decisions of our co-op. It is a simple matter of fairness that no district should have a disproportionate weight in board representation. I urge you to vote “yes” on the bylaw change.

(Rob Thesman is an OPALCO member and the author of the bylaw change.)

TACKA Morgan - Part Deux

The analyst currently known as (TACKA) "W.D. Morgan" has been following the various OPALCO conversations in the media, and she wanted to post a response ... but as she worked on her response, it kinda ballooned into a new post.

So here is the new post from W.D. Morgan.
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It might be worthwhile for the people buying into the “dark conspiracy” storyline of Chom & Steve Ludwig to just take a step back and look at the really big picture. A couple of people have made comments along the line of “well, if OPALCO is raising revenue over the period through 2019 to the tune of $27 million and all they have to do is buy a $15 million cable, then why can’t they just drop the rate increases to let members keep the ‘extra’ $12 million”.

Two things to consider:

First, let’s start at the 10,000 foot level: replacing the Lopez-San Juan underwater cable isn’t the only thing OPALCO has to do over the next few years. BPA power costs alone are expected to rise from $7.5 million annually in 2013 to $9.3 million annually in 2019. Spending on energy savings programs is expected to rise from $832 thousand annually in 2013 to $1.35 million annually in 2019. Depreciation was $2.7 million in 2013 and is expected to rise to $4.2 million in 2019. A word about the depreciation: first, depreciation isn’t a cash cost, it’s the recovery of a cost already spent. But, it’s indicative of the “using up” of the asset, so it’s an important number to watch; and if it’s an asset that you’ll need to replace, the depreciation must be matched by either savings or increased borrowing capacity to be able to pay for the purchase of the replacement asset.

And, oh Lord, we have a lot of assets that will need to be replaced. The biggest and most talked about it the Lopez-San Juan underwater cable. But remember, that’s just the start. Comparing our costs to the costs of mainland communities doesn’t make any sense, despite the apples to carrots comparisons that some of the “energy experts” around here like to promote. OPALCO serves a rural, not dense, service area with challenging terrain (rocks, hills, wetlands, etc. etc. etc.) THAT IS SEPARATED FROM THE SOURCE OF OUR POWER BY 5 MILES OF SALT WATER. Comparing OPALCO’s maintenance costs to some urban or suburban village on the mainland far away from salt water is pointless. All the things that make the San Juans special make it a difficult area to serve from a utility standpoint. [Want a market-based existence proof of that? Two words: Century Link.]

And, as OPALCO has noted, the marine environment is causing cable replacements to happen earlier than they originally thought. And the Lopez-San Juan cable is only the start – OPALCO has pointed out that they’ll need to replace at least 3 other underwater cables within the next 20 years. Remember – OPALCO will either need savings or borrowing capacity to fund those replacements. Oh, and the changing environmental concerns means that OPALCO can’t just leave the old cable in place – OPALCO must remove the cable being replaced. Maybe we can have a work party to take care of that – everyone bring your diving helmet!

Let’s climb a little higher to 30,000 feet and consider OPALCO’s forecasted income.  [Numbers here and above are drawn from OPALCO’s 2019 budget document, found here.]

Taking into account the new rates, here is the net margin that OPALCO is forecasting through 2019:

• 2015          $1.098 million
• 2016          $0.929 million
• 2017          $2.075 million
• 2018          $1.470 million
• 2019          $2.101 million

So, a total of $7.673 million in budgeted net income over the next 5 years. Not increase in net income. Total net income. On a total budgeted revenue of $139.2 million for that same 5 years. So the budgeted net income amounts to 5.51% of income.

Yes, gross charges for electricity and facilities are going up. But that net income is needed to cover increases in costs and reinvestments in plant and facility over the next 5 years – and OPALCO will need to save for repairs and reinvestments for the period after that 5 years is over as well. If the savings isn’t directly spent on those capital expenditures, it will be needed to demonstrate the ability to repay loans to fund those costs. As members of the cooperative, we should be asking questions regarding what the money is getting spent on. OPALCO has provided a lot of information about that already, but it’s incumbent on every member to satisfy herself or himself that the reinvestments make sense.

My second point, and I’ll make this much briefer than the first, is that it seems like a large part of the discussion is about the breakout between electric charges and facilities charges. Emotional arguments aside, this is simply a cost allocation issue – if most of the members agree that the money OPALCO is taking in needs to be spent on specified costs, then the remaining question is how is the allocation done between the marginal cost of electricity and the cost to have access to the grid. One way or another, all of that money is going to be collected from the members.

Let me break this subdiscussion down into two separate conversations: first – what is the reasonable way to charge for facilities costs vs the actual electrons people use. Second, what, if anything, should be done to assist those members most in need – Chom and others want to combine those into a single discussion, but they’re really separate issues.

What is the true cost to have a meter on your house? Well, the utility is paying the same costs to hang your meter, you’re using the same distribution lines, the maintenance gals and guys are maintaining the entire system and your meter is hooked up to the same underwater cable as everyone else. That’s true even if you have solar pre-heated water, even if you have a solar array on your roof, even if you have a windmill, even if you turn the switch off on your power cords, even if you have LED lights instead of compact fluorescents, and on and on. The costs to maintain and install the system and line up to your meter are the same irrespective of whether you only use the system on the coldest days in the winter or whether you leave your doors and windows open and the a/c on all year. Maintenance and repair on the system isn’t caused by the number of electrons running through your meter, it’s caused by weather, the marine environment, the passage of time AND THAT WE LIVE 5 MILES ACROSS AN OPEN OCEAN FROM OUR POWER SOURCE. Sorry, it just is what it is. Discussing a reasonable facility charge in the San Juans by reference to how a utility in Southern California does it, where their electricity distribution lines run a short way from the source ACROSS OPEN SAND, is pointless.

Lastly, the members need to have a discussion about what, if anything, it is reasonable to do to help our least fortunate members afford electricity. To conflate this conversation with the determination of what the facility charge should be is wrong-headed, but if your goal is to confuse members, it’s a good way to inflame the discussion. But we do need to talk about who should be assisted, what the income cutoffs should be, what the form of that assistance should be and what measures should be in place to ensure that no member is gaming the system. And we should have that conversation bearing in mind that OPALCO is a cooperative – WE are the utility, so every dollar someone doesn’t pay is a dollar that must be collected from someone else.

-- W.D. Morgan

Guest Column - The Straight Story on OPALCO

Utility costs are increasing, but TH doesn't believe the local press/blogs have adequately summarized all the moving parts related to OPALCO's current situation ... maybe because no one wants to ... or maybe because no one has done the research. That's why TH is publishing the following analysis by someone who has carefully analyzed the finances and plans of OPALCO. We have no dog in this hunt. This is just a straight-up analysis from a financial expert who is also a keen watcher of local dynamics. You can call her (or him) W.D. Morgan.

Enjoy!

___________________________________________________

There is an ancient belief that the gods love the obscure and hate the obvious. Without benefit of divinity, some of the self-described community activists here in the San Juans, like the gods, are trying to confuse OPALCO members. To what end is not clear, they just “want to ask questions” and “start a conversation”. No one here at the Trojan Heron is opposed to conversations or questions, we just like to make sure that the conversation isn’t premised on confusing correlation with causality, and other fun logic flaws. Then we can get back to arguing with and disliking each other for more concrete reasons.

First, no one here at Trojan Heron works at OPALCO, does any consulting for OPALCO or has any other connection other than as members of the cooperative. We’re not advocating for or against anyone running for the OPALCO board.

Our agenda? As always: question everything. Even question the self-proclaimed experts (because experts have done some of the dumbest, or most disastrous, things imaginable). Especially ask questions of the people who say they don’t have an agenda but simply want to ask questions themselves and have a conversation. Seems to me that we should have a community conversation about all the people (usually the same people over and over again) who want to have community conversations.

The OPALCO topic of the week seems to be their 2014 financial statements, their 2015 budget and, lastly, their proposed rate increases through 2019. Witness the article in the Island Guardian by Chom Greacen, a resident of the Lopez Community Land Trust and "founder of Palang Thai, a nongovernmental organization that conducts public-interest research and works for fair, sustainable, and democratic development of the energy sector".

While the lead-in to Greacen’s article in the Island Guardan promises “what’s behind the rising rate is worse” than the rate increases, you’re never let in on the secret. Only questions. More questions. And a supposition that there’s a dark conspiracy at OPALCO to bury the costs of a broadband build-out in your electric rates. The “proof” of that? Why ... it's the “curious patterns”. Patterns of increasing costs. Mysterious words are used: “grid control backbone”, “underground cable replacement” “computers/servers/software”. There are no conclusions, mind you. More questions. Words like “perhaps”. More questions.

Never mind that the answers to those questions are largely found in a single document.

Some of the things in Greacen's article simply aren’t accurate. For example the article states that a $7.5 million loan to the broadband subsidiary has “pushed OPALCO financially close the brink”. And what would make her think that? That OPALCO as of 12/31/14 needed to negotiate an exception to a loan covenant as to its TIER requirement (see below for more about TIER). Hmmm ... as long as we’re posing questions: how did a loan that hadn’t been made as of 12/31/14 and won’t be made per OPALCO’s own schedules until the years 2015 through 2019 (in the link, see page 12 of 20, explanation for line 30, debt) ... how did the as-yet-to-be-incurred debt push OPALCO “close to the brink” on 12/31/14? It must have involved a time machine. Or maybe it didn’t push OPALCO “close to the brink”. Or maybe OPALCO wasn’t “close to the brink” at 12/31/14 – for support see discussion of financial ratios below.

But, back to the cost of the broadband subsidiary.  Board minutes indicate that the start-up costs will be that $7.5 million amount, but the only out-of-pocket costs for members will be paid at $3/member/month for 24 months, beginning in 2015. The rest is either directly paid from cash flow from the new broadband business or indirectly from the cash flow of the new business as it pays down the intercompany loan from the parent.  The board minutes also specifically reflect that the costs of the new entity “are not included in the new rate structure”.

You’re encouraged in Greacen's article to find scheduled rate increases “alarming” ... 41% by 2019. You’re not pointed to the detail. It’s here - it’s a 12% increase in 2015, followed by estimated increases of 6% annually thereafter. And the explanation? It’s right here - and, hey, guess what – it’s consistent with what OPALCO has been saying for months. Electricity cost and electricity infrastructure costs are driving OPALCO rates upward.

The author pretty much accuses OPALCO of fraud when she goes into more detail about the “curious patterns” where she wants you to conclude that increases in headquarter facility costs, computers/servers/software and even underground cable replacement are really hidden broadband costs. Actually, you don’t have to look further than here to see that all the costs related to Island Fiber are shown separately from OPALCO operations down in “non-operating margins” where the revenue from and costs associated with “NewCo” (really Island Fiber/Rock Island) are shown.

And what about those patterns? It’s worthwhile remembering that correlation doesn’t mean causation. That when two numbers both increase, it doesn’t mean there’s a connection. It’s something that even people with graduate degrees forget or don’t notice, but it’s important. You can end up with graphs that show that suicides are "caused" by US science spending. Likewise, you can also end up thinking broadband is driving up OPALCO's rates, when there is precious little evidence to support that connection.

Greacen makes much of OPALCO’s TIER ratio, without explaining what it is. But it’s name dropped. And it’s “alarming”. What else would you need to know?

It’s useful to understand what a “TIER” calculation is (and isn’t) before discussing its relevance. TIER stands for “times interest earned ratio,” you’ll also see it commonly referred to in financial literature as the “interest coverage ratio”. It’s a leverage ratio designed to measure the amount of earnings a business has available to make interest payments on its debt obligations. The formula for the calculation is: earnings before interest and taxes divided by interest expense.

“Earnings before interest and taxes”, sometimes called “profit before interest and taxes”, is, just as it implies, the net earnings of a business before payment of interest and non-operating taxes. It’s the amount of money available to make the payments on the debt the business owes. “Interest expense” is just that – the interest on all debt, long and short-term, of the business.

What kinds of things affect a TIER calculation? Decreases in operating margins – as perhaps might be caused by relatively flat revenue caused by warmer winters while at the same time operating expenses increased because of BPA pushing through rate increases on purchased electricity? Yep. That's what happened. Also, having to pay to replace existing underground cable? Yep. That happened too.

It’s reasonable to expect OPALCO to explain their TIER calculations and the changes over the years, but to accuse them of financial fraud without acknowledging the answers they've already given ... or perhaps not even knowing that answers had been given to those questions ... is an overreach.

What other sort of analysis might be done on OPALCO’s financial statements. Let’s take a look at a couple of widely used ratios:

• Liquidity Ratio – measures the ability of the business to pay off current liabilities. A business’s Liquidity Ratio is calculated as: Current Assets/Current Liabilities = Liquidity Ratio. Usually, a business with a liquidity ratio of less than 1.5 is considered to be in financial distress. OPALCO’s liquidity ratio at 12/31/14 was $9,883,829/$3,438,051, or 2.87 (or if you work for CNBC, about 3). 
• Leverage Ratio – measures how much the business relies on debt. The Leverage Ratio is calculated as: Equity/Total Assets = Leverage Ratio. A business with a Leverage Ratio lower than .3 might be considered to be overly leveraged and in financial trouble. OPALCO’s leverage ratio at 12/31/14 was $40,662,189/69,270,631 or .59 – note that the leverage ratio cannot be higher than 1.0. At the December 2014 board meeting, the OPALCO board adopted a resolution requiring that the company maintain an equity-to-capital ratio, another label for leverage ratio, of at least 40% on an annualized basis.
• Quick Ratio – measures a business’s ability to meet short-term obligations and is calculated as: (Cash & Cash Equivalents + Marketable Securities +· Accounts Receivable)/Current Liabilities. OPALCO’s quick ratio at 12/31/14 was ($3,534,091 + $0 + 3,036,986)/$3,438,051, or 1.91. The industry averages for electric utilities is a quick ratio of between .85 and 1.0 – meaning OPALCO’s ability to meet short-term obligations is better than average.
• Long-Term Debt percentage – measures the proportion of a business’s total assets that was financed by long-term debt (technically, this is the remainder of the Leverage Ratio calculation, there will be a small difference in the two calculations related to current liabilities). OPALCO’s long-term debt percentage at 12/31/14 was $24,987,266/$69,270,631, or 36%. OPALCO’s long-term debt percentage is somewhat better (i.e., lower) than other electric utilities.
• Percentage of Cash and Short-term Investments – measures the percentage of total assets made up of cash and short-term investments; this, like the Quick Ratio, reflects the ability of the business to fund operations. OPALCO’s percentage of Cash and Short-term Investments at the end of 2014 was ($2,254,475 + $1,279,616)/$69,270,631, or 5.1%.

Is all of this still confusing? Maybe read through this ... it’s the budget document that OPALCO put together to explain the 2015 – 2019 activity and it covers not just the budgets but has narrative explanations of most things. If you just want the highlights, they’re covered in the first few pages and then you can drill down into whatever excruciating detail you’d like.

Actually, if OPALCO can be criticized for anything, it’s probably that they put out so much information. Monthly board packages often run 50 pages or more. Sometimes well over that. One worthwhile suggestion would be that members need to have someone at OPALCO curate the information, telling the members where to look to find executive summaries of information and where to look if they want to drill down into the detail.

Here’s the executive summary: by all appearances, OPALCO isn’t “close to the brink”. On the contrary, it’s healthy compared to others in the electric utility industry. Sure it’s reasonable to “ask questions and demand straight answers from the board and management” of OPALCO. It’s also reasonable to ask members to refrain from insinuating dark conspiracies as a community organizing strategy. Alleging fraud on the part of the management and board of the co-op where your only “proof” is various questions that have largely been answered is simply irresponsible.

OPALCO is a cooperative – when we talk about the “company” we’re talking about “us”. Where management isn’t perfect, we, the owners, should require them to improve. And management has to remember that perfect consensus will never be achieved – what they owe the members is that conversations are fully fleshed out and then the elected board decides what to do. Keeping in mind that not everyone will be happy.

Worthwhile conversations to have amongst the members would be to talk about relative merits of differing ways to try and equitably allocate costs, or to hear OPALCO’s ideas about what happens to its business model over time as more users switch to solar generation, or to talk about what we as members can do to assist those members most in need.

Those conversations aren’t helped when the opening position is accusing management of fraud. If I want dark conspiracies, I’ll watch The X Files on Netflix. Or I would if my broadband were fast enough. 

-- W.D. Morgan  

Potentially Actionable?!?

So now OPALCO is threatening to sue Bob Jarman?

We were going to move on from the OPALCO story, but the following letter just came to light. It seems that after Bob Jarman wrote a letter to the online news outlets raising questions about OPALCO, he received the letter below from OPALCO's legal counsel. We presume the current OPALCO Board authorized the letter ... but if they didn't, that's even worse.

It's a head scratcher. What is it about this place that causes everyone in an official position to view dissent as a crime?

For full disclosure, the Trojan Heron would like nothing better than to have high-speed broadband access for everyone in the islands. We feel it is a necessity for any participant in the modern economy, but holy smokes ... can we get some outfit to provide broadband service who doesn't behave like either OPALCO or Centurynolink?

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

In The Dark - Day 5

Things are far from normal, but here we are at the end of Day 5, and partial service has been restored ... thanks largely to OPALCO.  OPALCO issued a press release, which says in part:

OPALCO’s data communications system is now carrying the phone and data traffic for San Juan Island, and providing 911 and phone solutions for the rest of San Juan County until CenturyLink can repair or replace their failed submarine cable.

The sanjuanislander.com has re-posted articles from a decade ago regarding OPALCO's decision to install fiber optic cable in excess of their immediate needs. Interesting reading.

The Island Guardian is reporting that a barge with divers was scheduled to begin replacing the damaged CenturyLink cable today. No word on when that might be completed.

There has been no further press release from CenturyLink that we know of. The County DEM is announcing on Facebook:

Orcas Islanders - Sprint is sending their Emergency Response "COLT" to the Orcas Library Sunday morning. This is a communications vehicle which provides wifi coverage and they'll have 100 phones for people to make calls. It should be there about 10 AM. 

Just off the phone with Verizon, their towers in Friday Harbor and Roche are now operational. Voice, data, and 911 are all working for Verizon wireless.

AT&T has three mobile sites up in town on three main islands, and some of their regular network may be coming online during day today.

We still don't know what caused the failure, but there have been a couple of interesting (if implausible) rumors. One rumor says that an earthquake, centered on San Juan Island, struck at the same time as the cable failure. We have checked with the USGS, and about 6 hours before the cable failure there was a very small magnitude 2.3 earthquake with a focus 12 km deep and an epicenter 8 km northwest of Friday Harbor (see USGS screen shot below). It seems very unlikely that this would have contributed to the failure.

Another rumor says that the optical cable was already near the end of its projected operational life, and it just wore out, aggravated perhaps by a seafloor ridge acting like a knife to gradually cut through the cable as it swayed back and forth in the bottom currents. We are not experts in optical communications, but this also seems implausible.

But something happened ... we just don't yet know what.

Commenters have been providing some great information and viewpoints. Thanks to all of you for sharing what you know, and keep the comments (and even the rumors) coming.

Click to enlarge - Earthquake on November 4, 2013

In the Dark - Day 4

We will put up a daily post about the status of the optical line break, even if there is nothing to say, in an effort to keep readers informed. Information on the outage is spread over several websites and Facebook, but there is no central clearinghouse for information. We'll do our best to summarize and give links to the latest information.  If you do have connectivity, even for only a few minutes, you can check here for the latest without having to search hither and yon.

If you have anything to add, please do. Here is the latest --

• DEM (the County Department of Emergency Management) is reporting on their Facebook page that 911 service is restored on all islands. DEM also reports that Verizon is working on a temporary link to get their Friday Harbor tower working. They also add that Verizon, AT&T, and Sprint are all mobilizing to improve connectivity.

• OPALCO also is reporting that 911 service is restored.

• No new information on repairs. No information from CenturyLink. No other information from the County.

• The story is beginning to show up in the larger media. Below is an article from KING 5.

SAN JUAN ISLAND, Wash. -- Frustration was spreading on the San Juan Islands, where residents entered their third day of a major phone and data disruption. 

A main fiber optic line broke Tuesday morning and the problems go far beyond losing 911 services. 

Laura Flaum, owner of Spring Street Deli in Friday Harbor says the outage has severely impacted her business. She can't run any credit cards, so customers have to pay with cash. 

She went from making 50 to 60 sandwiches a day, to making three.

It's devastating to businesses when you can't do credit transactions," Flaum said.

CenturyLink still doesn't know how an underwater fiber optic line was broken or how long it will take to fix it. Technicians are still trying to find a solution.

Internet and data transmissions are spotty at best. Some banks are closed. ATMs are down.

Sheriff Rob Nou says when 911 service went down, emergency personnel had to scramble to alert the public. 

"Reaching out to the community, getting fliers out, getting sandwich boards out, knocking on doors," said Nou.

Century Link had to redirect 911 calls to other working numbers on most of the islands.  On Thursday, San Juan County Department of Emergency Management tweeted CenturyLink reported 911 and island-to-island calling was working on Orcas Island as of 4 p.m. Thursday, and 911 was working on San Juan, Orcas, Shaw and Lopez islands. 

At the Friday Harbor Pharmacy, they finally got their internet back on Thursday. But staff can only call and receive calls from doctors and clinics on the island. 

"We were unable to receive any transfers, or prescriptions from the mainland," said pharmacy technician Cheyenne Mauldin.

Residents say the situation has moved beyond frustrating. 

"I can only call on the island by phone," said Ann Jarrell. "My cell phone is non-functioning. I have no internet, no email."

"I can't tell the weather," said resident Barbara Wollman. "I can't make an airline reservation. There's so much I can't do."

The bookkeeper at a gas station says she had to install a satellite dish just to order fuel. Island residents are thick-skinned, but island fever is spreading quickly.

Although tourists can't call to confirm hotel reservations, county council member Rick Hughes hotels want you to come anyway.

"If you want a rustic getaway, when you can feel sealed off from the mainland, this is the weekend to do it."