Electric Utilities Join the Telecom Fray

Article excerpt

MEET your new Internet company. It's your old power company.

Some of America's regional electric utilities have started down the road to becoming diversified companies that sell everything from television programming to software and phone services - including Internet access.

The threat of competition from unregulated power generators and the deregulation of the telecommunications business is causing utilities from Texas to California to re-examine their businesses. About a dozen are following a model pioneered by the Glasgow Electric Plant Board, a municipally owned power company in Glasgow, Ky.

Multipurpose cables

In 1989, the town of 14,000 began upgrading its ability to manage energy consumption. The town installed 120 miles of cable connecting every home and business to the utility, so energy use can be monitored and managed on a real-time basis. But this task requires only a fraction of the cable's capacity, so Glasgow's residents can also receive cable TV, phone, and Internet services on the same wire.

Laying such cable is expensive. But it allows utilities to do away with meter readers, immediately diagnose power outages, and most important, generate and distribute power more efficiently. It does this by putting premium prices on power during peak usage times. A utility can charge more for electricity at 5:30 p.m., when usage surges, than at midnight. By encouraging customers to switch off appliances at peak hours, the utility avoids building new power plants. Such "load management" can't be done if customers have ordinary meters that are read on site just once a month.

Last year, Dallas-based Central & South West Corp., a publicly traded holding company that owns four electric utilities in Oklahoma and Texas, joined the cable-laying trend. About 850 homes in Laredo, Texas, are participating in a pilot program that, next to Glasgow, is the largest in the country. The company eventually plans to have some 2,500 homes connected to its fiber-optic network. …