Dominion, Apco Leverage Grid Investments to Promote Rural Broadband

Virginia broadband availability map. Source: Dominion Energy “Broadband Feasibility Report”

by James A. Bacon

Virginia’s investor-owned utilities, Dominion Energy and Appalachian Power Co., could become key players in the Northam administration’s push to extend broadband access to rural communities.

A State Corporation Commission ruling is expected today on an Apco proposal to extend “middle mile” broadband in partnership with Bluefield-based GigaBeam Networks, which will provide “last mile” connectivity to retail customers in Grayson County.

And last month, Dominion announced a partnership with Prince George Electric Cooperative’s RURALBAND subsidiary to provide Internet connectivity to 3,600 customers in Surry County. Dominion’s “middle-mile” service would link Prince George local network with high-capacity fiber-optic trunk lines.

The logic behind these partnerships is that, spurred by the Grid Transformation and Security Act of 2018, Dominion and Apco are already spending tens of millions of dollars to install broadband in their electric distribution systems. They can add enough additional capacity to serve nearby rural communities at marginal additional cost.

As part of the grid-modernization efforts, Dominion and Apco are installing smart meters to more precisely track electricity consumption and are deploying sensors and devices to create smart, self-healing grids. These grids are designed to improve reliability by identifying failures in the distribution system, isolating the faults, and re-routing power without human intervention.

The Apco initiative in Grayson County is tied to the installation of 238 miles of 96-strand fiber optic cable. In parallel initiatives, Dominion is installing miles of fiber-optic cable along the backbone of its electric-distribution system extending deep into many rural communities.

“Grid modernization is coming one way or the other,” Nathan Frost, Dominion’s director of new technology and energy conservation, tells Bacon’s Rebellion. “We’ll be in some of these rural communities. We’ll take the broadband to a hand-off point, and a local Internet Service Provider will deploy their own cable at that point. We’ll provide the highway. The ISPs will provide the local roads.”

Who pays for the marginal costs? Last year, HB 2691, introduced by Del. Israel O’Quinn, R-Bristol, authorized the SCC to establish pilot programs to make broadband capacity available to nongovernmental Internet Service Providers in under-served areas. The costs to Dominion and Apco were capped at $60 million annually each. Rural broadband was declared to be in the “public interest,” and utilities were to recover their costs through rate adjustment clauses (project-specific cost recovery over and above the base rates).

In the Dominion-Prince George Electric Cooperative partnership, RURALBAND will pay to lease a portion of Dominion’s fiber capacity, allowing Dominion to recover some of its costs.

While the exact charge for that particular lease has yet to be determined, the idea is for lease charges to “offset” Dominion’s incremental added expenses, says Frost. This is not a dollar-for-dollar offset, he added, nor is it a revenue-generating scheme. “It’s about bridging the digital divide.”

Assuming Apco wins SCC approval, the utility’s Grayson County pilot project will last for three years. The company hopes to have the fiber-optic delivery system built by December this year.

“Broadband service for Grayson County helps guide us toward solving one of the problems holding back economic development in rural Virginia,” said Chris Beam, Appalachian Power’s president and chief operating officer, as quoted by the Galax Gazette. “This proposed pilot will also benefit our power customers with increased electric reliability from fiber infrastructure supporting advanced metering and distribution automation.”

The proposed Surry County project, which also will require SCC approval, will cost an estimated $16 to $18 million in investment by Dominion, PGEC, and RURALBAND, as well as state and federal grants.

Dominion laid out its vision for the middle-mile strategy in a 2018 “Broadband Feasibility Report.” The report described Dominion’s proposed Model 1 “Substation” model for deploying fiber-optic cable.

Dominion Energy has envisioned bringing fiber to all stations that are geographically located within an unserved broadband area and that do not currently have fiber. These 160 substations would serve as access points for third party providers. … Combined with the work contemplated by the GT (Grid Transformation) plan, the Company estimates costs for Model 1 up to approximately $310 million. This cost would be approximately $75 million higher without the planned Telecommunications Strategy investments proposed in the GT Plan.

Dominion’s Model 2 approach would build upon Model 1 by providing additional access points along fiber paths between substations. These would provide more opportunities for local broadband providers to connect, decreasing their fiber deployment and reaching more residents.

Other deployment models would bring Dominion Energy fiber lines even closer to the rural customers. Any proposal will require SCC approval.

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6 responses to “Dominion, Apco Leverage Grid Investments to Promote Rural Broadband

  1. Word just in… The SCC approved the Apco project.

    The SCC order contained some interesting data on the the cost of the pilot project.

    Apco developed two alternate plans for deploying fiber optic broadband infrastructure under the proposed Pilot: Scenario 1 involving installation of approximately 238 miles of riber optic cable, which would support full deployment of advanced metering infrastructure (“AMI”) meters and distribution automation and circuit reconfiguration technology; and Scenario 2 involving installation of approximately 146 miles of fiber optic cable, which would not support the full deployment of AMI meters. The Petition states that the estimated costs of Scenario 1 included approximately $17.5 million in capital investment plus annual operation and maintenance expenses of $481,000 and that the estimated costs of Scenario 2 include approximately $11.2 million in capital investment plus annual operation and maintenance expenses of $306,000. Subsequently, APCo lowered the capital requirements for Scenario 1 to $16.7 million and for Scenario 2 to $10.3 million.

  2. When the Buckingham Open House for the ACP was held, Dominion claimed that we’d get the most modern monitoring possible via broadband. When I responded that maybe they could help those whose land they cross get broadband we so much need, they immediately said “oh no, we can’t do that. The telecom’s won’t let us.”
    Along the way, plans for monitoring the ACP reverted to last century point to point monitoring/comparing rather than every inch monitoring via broadband. Since then, Dominion has denied ever promising broadband monitoring. I still don’t see dependable evidence that the ACP is needed, but IF it’s going to be built, it’s a darn shame it isn’t getting fiber installed along with the pipe. It will cost enough more to go back and do it later that it will probably not happen in my lifetime.
    It’s “interesting” when Dominion is willing to “help” communities and when it’s not. Most of the ACP goes through cooperative territory – another disgusting point to those of us forced to live with it against our will. We weren’t on their list for electric busses, either. Our local and state government rolled over and failed to require anything of Dominion of real value to affected citizens for supporting the ACP. It’s all in the politics, what Dominion can make the most money on, and what looks good to those who don’t really know the bottom line – who benefits and who’s taken advantage of. As for those of us taken advantage of, they apparently delight in making us lifetime enemies while giving us nothing. They wouldn’t even make the compressor station electric to reduce the pollution we’re exposed to; told us we can “afford” the pollution.
    Can those communities “working with” utilities to get this broadband count on long-term affordable rates or will they find themselves facing exorbitant bills with no recourse in the future? Seems super risky for communities that need broadband.

  3. I got confused between the rac and the “lease” stuff.

    also – are the utilities laying cable in the ground rather than stringing cable from their existing electric lines?

    are the costs spread across all Dominion/APCO customers or just certain ones?

    it’s hard to fully comprehend whole thing but I can see how the two utilities like the idea, 🙂

    Seems like if the cable companies themselves cannot find a profitable way to wire the rural – strikes me as not that different than when the utilities could not profitably extend electricity to the counties and essentially billed taxpayers to do it.

  4. Lots of little fiefdoms when it comes to anything involving fiber optic cables! The communications companies used to be intensely jealous of anything that smacked of communications infrastructure being built by electric [gasp!] utilities – back when phones were landlines that were all hardwired. Then it was the cable companies who jumped on that bandwagon, while telephone companies mainly pivoted to wireless and cell tower links (and relegated the old copper networks to folks who kept their landlines for pollsters and spam calls and the occasional DSL user). And then there are companies like Verizon that are involved in both.

    I can well understand the response reported by vca: “When I [asked if] maybe they could help those whose land they cross get broadband we so much need, they immediately said ‘oh no, we can’t do that. The telecom’s won’t let us.'” It’s all about who performs that last-mile delivery, who gets the retail interface with the customer, who gets to send the bill to the customer for the services delivered. Dominion could deliver the broadband signal 9/10 of the distance over fiber optic cable it owns but there will still be a jealous 3d party provider of broadband services at the end of the line insisting that Dominion never has a broadband relationship directly with retail customers.

    Here’s what Dominion gets out of it: as Jim B. said above, all that fiber optic cable, ostensibly installed for broadband services to consumers and paid for out of the new broadband funding, “would support full deployment of advanced metering infrastructure (“AMI”) meters and distribution automation and circuit reconfiguration technology.” Smart metering and distribution circuit automation have been big on our electric utilities’ agendas for years — and even though Dominion already railroaded legislation to impose those distribution-system upgrade costs on ratepayers directly, they would love it if they could offset some of that cost by tapping “broadband infrastructure” funds for fiber cable that will in fact serve both purposes — thus reducing the obscene electric retail rate increases that are going to follow from all of this.

  5. Dominion will certainly cheat somehow. Where is Herring?

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