NineStar Connect

Utility\telecomunications merger creates synergies

Greenfield, Indiana  |  Electric / Telco Cooperative  |  15,000 customers
Fast growing; rural and suburban community

While their industries may seem disparate, rural utility and telecommunications providers do share similarities since they provide many of the same customers with top-notch service and leading edge technology. Yet the industries have rarely worked together. However, things are beginning to change now that electric cooperatives encounter the same challenges that rural telcos faced decades ago. For example, as phone lines became congested during office hours, telcos introduced different rates for calls placed during peak day and evening hours – something that is now happening for the price of electricity. As the smart grid matures, it becomes impossible to ignore the operational, technological and customer relationship overlaps between utilities and telcos. However, for a variety of political, policy and business reasons, relatively few utilities and telcos have taken full advantage of these overlaps. A recent merger between a utility and telco broke the mold, capturing synergies unique to the partnering of these two providers of public services.

In January 2011, Central Indiana Power (CIP) and Hancock Telecom made history by becoming a single cooperative offering both telecommunications and electricity distribution. The merger set a precedent for how regional telecommunications and electric cooperatives can work together to provide rural customers with broadband connectivity and advanced energy management capabilities. The new organization, NineStar Connect, became the first rural cooperative to deploy a Tantalus Homerun™ Network, which leverages a FTTH (Fiber to the Home) backbone network for triple-play media (multi-channel TV, voice over IP, and high speed Internet), as well as full smart grid functionality provided by Tantalus. As a result, the electric division is able to leverage the broadband network for smart metering as well as prepare for the demand response initiatives proposed by Wabash Valley Power Association, which provides power to utilities throughout the region.

Although CIP did not receive federal grant money, the deployment ties together the objectives of both the Deptartment of Energy’s ARRA Smart Grid stimulus program and the Deptartment of Agriculture’s Broadband Initiative by bringing high bandwidth communications as well as advanced energy management capabilities to a rural community. Tantalus technology allows CIP to take trucks off the road by automating meter readings, outage detection, and disconnect/reconnect procedures. Furthermore, it can help the utility optimize the network through 24/7 power quality monitoring at member homes and on distribution equipment in order to detect and often correct a potential problem before it impacts service.

The broadband fiber network also supports data intensive applications including customer signaling and load control, which require rapid and reliable two-way interaction between the operations center and each customer. Capacity is virtually limitless, so more and more devices such as smart appliances will be able to communicate over the network without the risk of data congestion.

TUNet Results

  • First rural electric cooperative to implement Homerun Network; triple play media plus smart grid functionality
  • Second U.S. coop to merge with telecom; consolidates billing, customer service and other business functions
  • Avoids cost and complexity of building and maintaining two separate communications networks for utility and telecom
  • Adds new revenue stream through media services; helps pay for Smart Grid technology
  • Justifies capital cost to deploy fiber in rural areas; ability to extend triple-play media services to remote areas of county
  • Broadband network supports data intensive applications including load control and customer signaling
  • Optimizes network through 24/7 power
    quality monitoring at member homes and
    on distribution equipment
  • Simplifies and shortens deployment time to two years or less

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