Why are we doing this?
by Tim Cullpepper, CEO
Cullman Electric Cooperative is getting in the highspeed internet business. When we first starting seriously thinking about making this move, almost two years ago, I was skeptical. Do we really need or want to start another business? Will it take our focus away from our core mission to provide affordable electric power to our members? Yes, our members need good internet service, but is the Cooperative the right organization to provide those services? I had lots of questions, but didn’t know anything about the fiber or internet business. It was time to learn.
We wouldn’t be building a fiber system if the law hadn’t been changed to allow electric cooperatives to use our existing poles to hang the fiber. Our local legislative delegation was crucial in getting that legislation passed. Randall Shedd introduced the bill in the House, and Corey Harbison, Tim Wadsworth and Scott Stadthagen all enthusiastically supported it on the floor. Garlan Gudger was instrumental in getting the bill through the Senate. The change in the law in 2019 jump-started our efforts to build a fiber system.
We started to ask some questions about what we know best, providing electric power. What do we use fiber for now? What can it help us do? What is the future of electric power distribution? We use fiber to monitor some of our substations and we were using internet-based methods and equipment more and more. But, we weren’t really using modern equipment to the fullest extent. Almost every major piece of electric system equipment now comes fiber enabled so that it can be remotely operated. We didn’t have access to fiber in most places to take advantage of those functions. We also experienced two substation copper thefts in the last two years, partially because we couldn’t remotely monitor those locations. As a side note, breaking in to a substation that is energized at 161,000 volts is not smart. Don’t do it. There are easier, smarter, more honest ways to make money.
We found that fiber connections between our substations and to some of the fiber ready downline devices would greatly improve our ability to operate the system and to respond to outages. It would bring our electric system into the 21st century. So, we determined that building a fiber network would be a big improvement over our current system.
During this whole time, we were also aware of the need for internet service in many parts of the system. All of us at the Co-op live in Cullman and Winston counties, and are personally aware of slow speeds and no speeds. We have some employees whose job would be much easier if they could check into our computer systems from home on weekends and holidays during outages. But many of those employees don’t have the connection to allow them to do that.
So, we have a need for fiber on the electric system, and we know our members need internet services that fiber could deliver, but can we afford to build it? Can we build a system that will, at least partially, pay for itself? We hired consultants to look into the feasibility of building a fiber ring to connect all of our substations and most of our downline fiber ready devices and provide internet services to the members who live and work along those paths. We determined that we could serve around one in four members by providing internet service along the fiber ring. The feasibility study also stated that we could generate sufficient cash flow within a few years to help pay for the system.
We then hired an accounting firm to shoot holes in the feasibility study and question the assumptions. Would this really work? The accounting firm we hired found that the assumptions were very conservative and it would work. So, then the real work began. Designing the system, planning for the construction, lining up the money and getting approval from the State of Alabama and TVA.
So, here we are. We will be building 246 miles of 144 strand fiber connecting all of our substations. We will also be building 553 miles of secondary fiber which will help us to connect those members along the path. If enough of our members decide to use our fiber network, we will continue to build fiber and expand. But, fiber needs to pay for itself. We believe we can be successful in this business and hopefully we can provide world-class internet access and an improved electric system to all of our members.