BPL Seeing Increased Interest in State Commissions & Legislatures

In an interview on the eve of NARUC’s Winter Meeting in Washington, Chappelle told us BPL deployments are happening in rural areas. State regulators will be interested in the NRTC study, she said: “I suppose it would mean something that the rural association says ‘we are not looking into BPL,’ but as regulators we just want to look at all available options.” Her group, she said, will present a BPL report to NARUC on Feb. 13. Its focus will be on a study conducted by the Palo Alto-based Electric Power Research Institute (EPRI) on why utilities are embracing or shunning BPL.

As for NRTC’s conclusion that satellite is more appropriate for rural areas, Chappelle said regulators need to be technology neutral. Just as they wouldn’t cheer BPL over cable modem, she said, “I don’t think you will find many regulators say… ‘I am convinced that satellite is the way to go forever.'” The main issue uncovered by the NRTC study was the prohibitive cost of installing repeaters on long rural feeders, because of low population density, she said. But technology will “move so quick” that repeaters could become cheaper, she added. Despite the NRTC findings, some rural companies like the Ind. Electric Cooperative are finding BPL a “very attractive option,” Chappelle said. Some may prefer satellite because of the “makeup of the area” and others may not want BPL because cable modem or DSL is available, she said. “But for others who don’t have any option, I think BPL still is in play.”

Answering a question, Chappelle said she didn’t see a trend in the exit in quick succession of major utility players like IdaComm (CD Jan 30 p8) and PPL (CD Oct 5 p7) from the BPL business. “I would think the opposite is occurring,” she said, with “far more” utilities doing trials and deployments. If there’s a trend at all, she said, it’s that more states are looking into the possibilities of BPL. She said her report to NARUC will contain the results of the EPRI survey of utilities. State regulators want to know why some utilities aren’t embracing BPL and what their concerns are: “What did they find that makes the technology prohibitive for their purposes.” The report will also discuss the BPL developments in 2005, including the increase in the number of trials, interest evinced by big names like Google, which invested about $100 million in Current Technologies, commercial deployments and the FCC proceeding on the classification of BPL.

Asked if state regulators have reason to be encouraged by last year’s developments, Chappelle said she would have liked “things to move along quicker… because it’s an attractive facilities-based communications option and I for one am very interested in its internal applications [such as] outage detection, homeland security aspects. So I continue to be very excited about it.” But she said she understands why there hasn’t been a BPL “boom effect” on utilities because utilities are mainly in the electric business and not the broadband business.

Chappelle said the task force hasn’t been very focused on BPL regulatory questions. Her report will reflect the increased interest in the technology by states and Commissions, and that’s a change from 2004, she said. The N.Y. PSC just opened a BPL proceeding, she said, and Tex. enacted legislation last year providing a regulatory framework for BPL. And although Neb. passed a law that barred electric utilities from providing BPL, the legislature also set up a task force to study the issue further, she added. “So there are concerns” in some states, Chappelle said, adding that the N.Y. proceeding talked about it. “You don’t want your electric utility competing one-on-one with your telephone or cable provider because it is not their core business,” she said: “You worry about cross subsidization.” States could look to the Mich. model, in which “you have an arm’s length transaction” -- the utility acting as the landlord and an affiliate doing BPL, Chappelle said: “I think that’s primarily what the states are finding that look into it.”

Asked if utilities potentially shifting the costs and risks of BPL to ratepayers was a concern, she said it was for regulators but not for customers. Even in the Mich. BPL trials that wasn’t an issue for customers, she added. Customers aren’t worried about cross-subsidization of BPL, but are interested in “fast” broadband, she said. “They care about the service and the rates they are paying.”

EPRI Vp Wade Malcom told us that as part of its survey for NARUC, the institute had investigated: (1) Why some utilities embrace BPL while others aren’t interested, even in the same regulatory environment. (2) Why some utilities focus mainly on BPL’s internal applications and others view it mainly as a technology for providing broadband services. (3) Whether BPL’s benefits for utility applications outweigh the costs. Six utilities were chosen for the study, he said, without identifying them. EPRI is also forming an “interest group” to address long-term technical issues associated with BPL, he said.