Transcript
Page 1: Infrastructure. Infrastructure. Infrastructure

2009 APPA National Conference

Broadband:Meeting National & Local Opportunities and

Customer Needs

June 16, 2009

Terry HuvalLafayette Utilities System

Lafayette, Louisiana

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Infrastructure. Infrastructure. Infrastructure.

• America has a unique opportunity to “Re-invent Itself”

• Communities can respond as they did when they built their own electric utility systems

• Stimulus dollars can help…

• But, community vision and entrepreneurial spirit are more important

• Broadband can be an important key for the future of your community…and your utility

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Communities

• It’s where it all starts

• We want our communities to be vibrant and healthy

• Economic Development is a very competitive effort

• Historical “Highways” of Commerce

• Rivers

• Railroads

• Electricity

• Interstate Highways

• Broadband

•The Future “Highway” for Commerce and Education

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Envision the Community of Tomorrow• Your Utility

• Literally the “Energy Feedstock” for your community

• What does the future hold for electricity?

• Climate Change

• Renewable Electricity Standards

• Your customers already want more real time interaction with you

• To pay bills online or through the phone

• Communicate with you on their schedule

• They want real time information about their service with you

• They expect you to know when their lights are out (and to let them know when their power will be restored)

• They want products and features that save them money and protect the environment

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Envision the Community of Tomorrow• The Future of Commerce - Broadband

• The U.S. does not even rank in the top 10 nations in broadband deployment

• Japan, Korea, Canada, European nations are ahead of us

• Offering 100 Mbps as a standard feature, moving to 1 Gbps

• Fiber to the Home and Business is the most future-proof platform…

• …It is also affordable, proven and scalable

• Status of Fiber-to-the-Home (and Business) Deployments in the U.S.?

• Available to 3 million households & businesses

• Only 100 million to go! • The Future for Your Utility and Your Community?

• Implementing community-wide fiber connectivity and use it to provide advanced utility services

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• “I want it…when I want it!”

• Cell Phone, Internet, Blackberry’s…

• Instantaneous Access to Information

• Customers are demanding more immediate access to information…

• …They want more personalized treatment

Enter: A New Generation of Expectations

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Opportunity: Public Power is Well-Positioned

• The Future of Commerce – Broadband

• Customer-Focused and Community Conscious

• Motivated to Help Customers Manage Costs

• Less Rural

• Can Bundle New Services

• Telecommunications is Tomorrow’s Highway for Commerce

• System Automation

• But your community has to trust you…

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Lafayette’s Story

• Lafayette’s vision is far beyond just providing basic TV and Phone

services

• Just as important as Lafayette Utilities System (LUS) creation by

a vote of the people in 1896

• Lafayette is an oil and gas based community is very conservative,

but has always had a “wildcatter” entrepreneurial edge

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Community Benefits of Fiber• Communities with a fiber-based infrastructure have a distinct edge in bringing

in new businesses

• A Canadian Call Center has created over 600 new jobs

• Others are watching as LUS Fiber becomes a reality

• Lafayette, Louisiana (2008)

• Named one of the “Top 10 Places in the South for the Creative Class”

• Ranks 14th among America’s “Best-Performing Cities 2008: Where

America’s Jobs Are Created and Sustained” - Milken Institute

• Both cited the Lafayette Fiber to the Home initiative

• Create new Economic Development opportunities

• Providing high-tech opportunities for our kids to return home

• New Educational Experiences for today’s students

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Construction Plan• Head end construction began in

February 2008

• Electrical substations were designated to serve as “Hubs” for the fiber system

• Field construction begin in March 2008

• Fiber placed on:

• Existing poles (60%)

• Underground (40%)

• Using boring and hand digging

LUS Fiber Satellites receive Video programming signals.

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Infrastructure Layout

Existing Electric

Infrastructure

Substations (14)

New Fiber Infrastructure

Satellite

Mini Hub

LUS Fiber Head end

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InternetPhoneCable

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Business Plan and Pricing

• Bonds issued in June, 2007 - $110.4 million

• 25 years

• Includes Working Capital

• 60,000 homes and businesses in Lafayette

• Assumes 50% take rate (as compared to 70% customer interest)

• Business plan is viable with 23% take rate

• LUS Fiber pricing structure is simple and straightforward with all discounts applied to individual service offerings

• Meeting the (on average) 20% discount of standard competitor pricing

• Including an $85 Triple Play and addressing the Digital Divide

• Working hard to keep the trust of our community

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VIP Bundles Providing customers the whole package

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Residential VIP Bundles(Video Internet Phone)

VIP $84.85

Expanded Basic Video (more than 80 channels)

$39.95

* Includes:3-Way Calling Call Waiting Anonymous Call Rejection 5 ¢ per minute long distance (Continental U.S.)International long distance with 5¢ per minute for many countries in Europe and the Americas

10 Mbps Internet (Download AND Upload) $28.95

Phone Service* $15.95

VIP Total (Plus Applicable Fees and Taxes required by all providers) $84.85

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Residential VIP Bundles(Video Internet Phone)

VIP Silver $137.21Digital Plus Video (over 250 channels including High Def) $63.31

** Includes:Automatic Callback Auto Recall Call ForwardingDo Not Disturb Intercom Outgoing Call BlockingSelective Call Rejection Selective Call Acceptance Speed DialingCaller ID Voicemail 3-Way CallingCall Waiting Call Waiting ID Anonymous Call Rejection 5¢ per minute long distance (Continental U.S.)International long distance with 5¢ per minute for many countries in Europe and the Americas

30 Mbps Internet (Download AND Upload) $44.95

Phone Service w/Premium Phone Features Package** $28.95

VIP Silver Total (Plus Applicable Fees and Taxes required by all providers) $137.21

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Residential VIP Bundles(Video Internet Phone)

VIP Gold $199.99Digital Plus Video (over 250 channels including High Def) AND Premium Movie Suites (40+ channels including HD)

$98.09

*** Includes:Automatic Callback Auto Recall Call ForwardingDo Not Disturb Intercom Outgoing Call BlockingSelective Call Rejection Selective Call Acceptance Speed DialingCaller ID Voicemail 3-Way CallingCall Waiting Call Waiting ID Anonymous Call Rejection 5¢ per minute long distance (Continental U.S.)International long distance with 5¢ per minute for many countries in Europe and the Americas

50 Mbps Internet (Download AND Upload) $57.95

Phone Service w/Premium Phone Features PackageAND Unlimited Long Distance*** $43.95

VIP Gold Total (Plus Applicable Fees and Taxes $199.99

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Business

•Business Services

• 10 Mbps (Download AND Upload) $

64.95

• 50 Mbps (Download AND Upload)

$119.95

•100 Mbps (Download AND Upload)

$199.95

•Will develop customized solutions for business

telephone and video

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Notable Features• 100 Mbps Peer-to-Peer

• Included with every LUS Fiber internet product

• Opens new doors for citizens and businesses

• TV Web Portal

• Basic Internet access w/o a computer (remember the $85 Triple Play)

• Included with Digital Basic Video package

• Digital Basic package ($51.44) plus basic phone ($15.95) = $67.39

• An Even Better Arrangement then we promised

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Community Vision:

•“ Virtual Reality” Teleconferencing

• Reducing trips for meetings

• Distance Learning

•Better traffic monitoring and smart signalization

• Reducing traffic congestion

• Providing for better law enforcement

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New Economic Development Opportunities

• Communities with a fiber-based infrastructure will have a distinct

edge in bringing in new businesses

• Fiber communities have already seen an enhancement in Business

Development and Retention

• Creating high-tech opportunities for our kids return home

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Back to the Topic: Benefits of Broadband Connectivity to Basic Utility Services

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Time of Use Metering and Billing

• TEST:

• What is the difference in fuel cost for an Electric kwh generated

at 4 pm on a hot summer day compared to 4 am on that same

day?

• 4 pm – 15¢ -18¢ per kwh or MORE

• 4 am – 4¢ - 6¢ cents per kwh

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Basic Fundamentals of the Smart Grid

• Real-Time Customer Metering

• Letting customers know on a “when they want to know”

basis as to their current charges in real time

• Connect/Disconnect electric service remotely

“Uh, how close can I GUESS this meter reading?”

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Basic Fundamentals of the Smart Grid

• “So, why do I have to call you to tell you my lights are out…?

• Pro-active Outage Management

• Immediate knowledge of customer outages

• With automated updates

• Remote control of the entire utility system

• Smart Appliances

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Basic Business Case for LUS Smart Grid• Estimated Capital Costs - $22 million (about $200 per electric and water meter)

• New Annual O&M - $100,000

• Expected Financial Benefits are a reduction in:

• Meter Reading FTE’s from 22 to 6

• Unbilled electric and water losses

• Collections write-offs

• Field labor for cut-on and cut-off’s

• “Off Cycle” reads

• Increased generation, transmission and distribution capacity

• Cash Flow (a one-time feature of about $1.5 million)

• Total – About $3.3 million per year (plus other “quality” benefits)

• Payback – About 7 years (15 to 20 year asset)

• We will need additional funds to support this (Bond financing, Stimulus funding)

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Public Power happened because of a “Vision”

• To bring the new technology of “Electricity” to their communities

• To bring significant value in terms of price competitiveness,

customer service, reliability, Payments in lieu of taxes to their

communities

• To be on the front edge of new technologies and new approaches

to the business

• We suggest that “Smart Grid” is the next step

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Visions – From the Past

“The citizens of Lafayette have put themselves on record as being unequivocally in favor of progress and improved methods in matters that concern their well being and Lafayette has served a formal notice to the outside world that hereafter it proposes to occupy a position in the front rank of “up-to-date” towns on the American continent.”

“In common with the rest, The Advertiser is highly elated over the new order of things in course of development for Lafayette.”

“The Advertiser predicts that with the advent of waterworks and electric lights Lafayette is going to begin making history. Watch us!”

-Lafayette Daily Advertiser March 28, 1896

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Visions – For the Future

• In the years ahead, progress in Lafayette and around the world will be via the Information Highway.

• Becoming a leader in telecommunications will position Lafayette for powerful economic growth.

• The movement of information will be as much a focus of business and industry - or even more so - than the movement of cargo on today's air, rail and highway transportation infrastructure.

• The availability of advanced, affordable telecommunications services will be a priority of businesses looking for places to locate or expand operations. The fiber-to-the-home plan will draw them to Lafayette.

-Lafayette Daily Advertiser, January 29, 2009

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Visions – For the Future (con’t.)• That will mean more good-paying jobs and a better quality of life for our people. Lafayette gained strong, favorable national attention simply for proposing the Fiber for the Future program. It was immediately seen by national publications as a visionary, pioneering step toward a place of leadership in the global economy.

• While generating revenue is essential to paying off the bonds and keeping up with constantly changing technology, revenue is not the basic goal.

• Competition will result in better rates, but as desirable as that is, it is still not the focal point of the administration vision. The vision is one of technological leadership that will result in explosive economic growth.

• It is an exciting vision. We look forward eagerly to its fulfillment.

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Thank you

www.LUSFiber.com


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