In rural central Missouri, where even Walmart hasn’t ventured, an electric distribution cooperative with less than 50 staffers and 7,500 members is about to change the future for the communities it serves.
Gascosage Electric Cooperative has won more than $15 million in federal and state funds to deploy gigabit broadband.
But how did this small co-op, which will hire its first IT administrator this year, manage to enter the fast-paced, highly competitive world of retail internet?
Major assistance from its generation and transmission cooperative.
“If it weren’t for Sho-Me and their staff being there for us, we would have probably never filed for the first grant,” says Carmen Hartwell, general manager of Dixon-based Gascosage. “They’ve literally helped with absolutely everything.”
Sho-Me Power Electric Cooperative is one of a growing number of G&Ts exploring ways to aid their member co-ops that want to enter the broadband space. It’s a trend that’s expected to increase as more rural consumer-members clamor for better connectivity and more federal dollars become available to reach unserved and underserved areas.
“There are any number of reasons a distribution co-op would enter the broadband business, but chief among them is simply the grassroots desire—and need—for broadband from their member-owners,” says Paul Breakman, NRECA vice president for cooperative business solutions. “G&Ts are responding to similar messages from their member-owners, the distribution co-ops.”
Several G&Ts with fiber optic networks are supplying middle-mile connections and other backbone support. Sho-Me Power, which created Sho-Me Technologies in 1997 to handle its substation fiber communications and large commercial accounts, is taking a more comprehensive approach.
Beyond broadband grant filing, the G&T offers feasibility studies, engineering and network design, legal contract work, equipment recommendations, system monitoring, and marketing, including logo design, safety stickers, door hangers and welcome kits. Sho-Me Tech also has call center staff to assist a co-op’s newly connected members.
“It absolutely is a perfect example of how G&Ts provide to their members like we as distribution co-ops try to provide things to our members,” Hartwell says. “They are a trusted partner, more than any other partner you can have.”
Gascosage is the first of Sho-Me’s nine member co-ops to pursue broadband.
“The board was interested in doing broadband, but the cost of it was just so astronomical,” Hartwell says. When Sho-Me Tech offered to help with grant applications, “it was a game-changer.”
“When I say we knew nothing about it, I mean we knew nothing about it,” she says. “If it had not been for that partnership with Sho-Me, we would probably be still sitting here thinking, ‘That would be nice to do.’ I’m hoping other co-ops are able to rely on their G&T as much as we have ours.”
With Sho-Me’s help, the co-op connected 83 residential members last year from a $402,000 state award. Gascosage will receive $14 million from the first round of ReConnect, the U.S. Department of Agriculture’s rural broadband loan/grant program, to build a fiber network passing 1,300 homes and businesses and won another $700,000 from ReConnect’s second round.
“We are in a unique position to help,” says Kari Harles, chief telecommunications officer at Sho-Me, which has over 8,000 miles of fiber. “If our co-op members need anything, we are there. We try to figure out ways to help and make life a little easier for them.”
Sho-Me Tech even allows co-ops outside its territory to pick its collective brain on fiber networks or backbones.
“Most G&Ts have some resources to help their co-ops with fiber-to-the-home deployments,” Harles says.
She says broadband investments “go back to the co-op family” in savings and the intangible rewards of providing a much-sought-after service.
“If our members want our help with almost anything, we are more than willing to give them a hand when needed,” Harles says. “It can be a real game-changer for some communities, and it can be a lot of fun to be a part of.”
‘Part of the army’
Arkansas Electric Cooperative Corp. (AECC) is constructing a large statewide fiber backbone for its operations that is available as a “middle mile” connection for 14 of its 17 distribution co-ops that are pursuing retail broadband.
“We are not leading the charge; we are part of the army assisting in the delivery of this essential service,” says Lori L. Burrows, vice president and general counsel of the G&T as well as Arkansas Electric Cooperative Inc. (AECI), the statewide based in Little Rock. “Our presence in this space provides them the comfort to say, ‘I’m not out there on my own.’”
AECI formed a subsidiary, Arkansas Fiber Network, that joined Diamond State Networks, a consortium of Arkansas distribution cooperatives that is investing $1.6 billion to build more than 50,000 miles of fiber to bring broadband access to 1.25 million rural Arkansans.
“Our consortium delivers an economy of scale that provides great benefits to our members,” Burrows says.
Don Crabbe, president and CEO of Jacksonville-based First Electric Cooperative Corp., underscored the importance of the statewide/G&T in closing the state’s digital divide.
“We’re all committed to provide fiber to the home for every one of our members who chooses to have it; that is our mission now,” Crabbe says. “It makes sense for us to do things jointly. That is more economical. The cost per unit would have been higher for us being on our own. The statewide/G&T, at end of the day, is us.”
In Michigan, plans by Wolverine Power Cooperative for a fiber backbone tipped the scales for one distribution co-op to deploy retail broadband.
With nearly 60% of its members signing up, the need for broadband in the area served by HomeWorks Tri-County Electric Cooperative was evident. But the project carried significant cost and commitment for the co-op.
“Having a partner to work with, to eventually integrate our systems together, helped the board understand that it was a good decision,” says Kacey Thelen, the co-op’s marketing manager.
The co-op will use the G&T’s fiber for redundancy, reducing its expenses.
“If a storm rolls through or tractor pulls a line down, its nice to know you have backhaul, and members don’t even know a line is down,” Thelen says.
Wolverine sees leasing dark fiber as a new way to serve its seven member co-ops, and it developed a model agreement for the transactions.
“One of our main duties to our members is to maximize the value of the assets they paid for,” says Joseph Baumann, the G&T’s vice president and general counsel. “We do it every day with our generating plants. We do it every day with our transmission lines. And now we think that there’s an opportunity—one that cannot be and should not be denied—to maximize the value of fiber going forward.”
Reconnecting with members
Witnessing one of Gascosage’s first in-home connections was unforgettable for Sho-Me’s Harles. The member needed reliable broadband to work from home during the pandemic while her daughter and grandchildren were living with her.
“It’s amazing how appreciative the community is,” she says.
For rural families, Hartwell equates the importance of internet access to electricity and believes the “benefits are limitless” for both members and co-ops.
“We don’t really have industry; it’s mom-and-pop businesses, grocery stores,” she says. “This is making a world of difference, having this fiber, in creating new jobs here.”
Gascosage will hire at least seven new positions and remodel vacant warehouse space for its fiber operations. Hartwell expects the versatility of broadband will forge a stronger connection with the co-op’s members.
“By providing this necessity to our members at this time when they really need it, they now see the value again in cooperatives,” she says. “We take a whole new role in their life.”