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2009 APPA National Conference Broadband: Meeting National & Local Opportunities and Customer Needs June 16, 2009 Terry Huval Lafayette Utilities System Lafayette, Louisiana. America has a unique opportunity to “Re-invent Itself”

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2009 APPA National ConferenceBroadband:Meeting National & Local Opportunities and Customer Needs June 16, 2009Terry HuvalLafayette Utilities SystemLafayette, Louisiana

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

Infrastructure. Infrastructure. Infrastructure.



  • 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
envision the community of tomorrow

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
envision the community of tomorrow1

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
enter a new generation of expectations

Enter: A New Generation of Expectations

  • “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
opportunity public power is well positioned

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…
lafayette s story

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
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

Community Benefits of Fiber

construction plan

LUS Fiber Satellites receive Video programming signals.

  • 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

Construction Plan


New Fiber Infrastructure

LUS Fiber Head end


Existing Electric Infrastructure

Mini Hub

Infrastructure Layout

Substations (14)






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

Residential VIP Bundles(Video  Internet  Phone)

VIP $84.85

* 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


Residential VIP Bundles(Video  Internet  Phone)

VIP Silver $137.21

** Includes:

Automatic Callback Auto Recall Call Forwarding

Do Not Disturb Intercom Outgoing Call Blocking

Selective Call Rejection Selective Call Acceptance Speed Dialing

Caller ID Voicemail 3-Way Calling

Call 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


Residential VIP Bundles(Video  Internet  Phone)

VIP Gold $199.99

*** Includes:

Automatic Callback Auto Recall Call Forwarding

Do Not Disturb Intercom Outgoing Call Blocking

Selective Call Rejection Selective Call Acceptance Speed Dialing

Caller ID Voicemail 3-Way Calling

Call 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


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


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

Notable Features

community vision

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
new economic development opportunities

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
time of use metering and billing

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
basic fundamentals of the smart grid

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?”
basic fundamentals of the smart grid1

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
basic business case for lus smart grid

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)
public power happened because of a vision

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
visions from the past

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, TheAdvertiser 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

visions for the future

Visions – For the Future

-Lafayette Daily Advertiser, January 29, 2009

  • 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.
visions for the future con t

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.

Thank you