Case Study: Arkansas Valley Electric Cooperative
Making Waves – Arkansas Valley Electric Cooperative Takes Fiber to the Home for All Members
For Arkansas Valley Electric Cooperative’s (AVECC) management team, broadband isn’t just a business – it’s a calling.
“We promised rural Americans and farmers 80 years ago that we would be there for them, and we were, with electric service no one else would provide,” says Brandon Fisher, AVECC Technology and Communications Manager. “This is really no different. Providing broadband changes people’s lives and makes rural living – which has become very difficult – easier. Great folks come from rural areas and we want to make sure they stay. This is what we’re meant to do.”
The present grows from the past
Like many electric co-ops, AVECC formed in the late 1930s, organized by a group of businessmen and farmers in west-central Arkansas to bring electricity to the farms and communities others had bypassed. From the initial 57 miles of power line, the co-op has grown to 6,600 miles of distribution line, providing electricity service to north of 59,000 meters in 13 counties in Oklahoma and Arkansas.
Fisher was a member of the relatively new cadre of co-op leaders in 2018. In one memorable conversation, the topic turned to future aspirations – what more AVECC could do to strengthen its communities. Broadband was at the top of the list, so the team began exploring the idea and eventually made a successful pitch advocating a broadband build to the CEO Al Simpson, and ultimately the co-op Board of Directors.
“People are leaving rural areas because of the lack of internet service,” explains Simpson. “With access to high-speed internet, our members will be able to work from home, children will be able to complete homework assignments and people have access to advanced healthcare. Our communities can grow and thrive as businesses gain the connectivity they need to operate.”
The AVECC team had passion, energy and enthusiasm in spades, but they lacked two critical elements for success – broadband experience and expertise. One phone call with Conexon partner Randy Klindt, however, took care of that.
“It was pretty clear that Randy had a wealth of knowledge on how to do this,” said Fisher. “Plus, he and Jonathan Chambers have a passion and confidence for taking broadband to rural America. You can’t replace that with knowledge.”
Armed with a Conexon feasibility study that proved out the viability of the broadband business, AVECC officially launched an initiative in June 2018 to provide fiber to the home for 100 percent of its members. Wholly-owned subsidiary Wave Rural formed a short time later.
“People are leaving rural areas because of the lack of internet service. With access to high-speed internet, our members will be able to work from home. Children will be able to complete homework assignments and people have access to advanced healthcare. Our communities can grow and thrive as businesses gain the connectivity they need to operate.”
- Al Simpson, CEO - Arkansas Valley Electric Cooperative Corp
Arkansas Valley’s fiber-to-the-home project is wholly connected to its Advance Smart Grid project that will upgrade its electrical infrastructure significantly. Intelligent, interactive tools and technology made possible by the fiber-optic network and interconnected substations and offices will allow the cooperative to measure, analyze, predict, protect, and control virtually every aspect of the electrical distribution infrastructure.
“We know that high bandwidth, low cost and reliable power are three things that can make a community more attractive to prospective businesses,” says Simpson. “Part of our commitment is to provide low-cost and affordable electricity to members and improve the quality of life of the communities we serve. This project – a smart grid upgrade and fiber to the home – will allow us to do both.”
The ultimate measure of success for AVECC is relatively simple – broadband accessibility for 100 percent of its members.
“We’re not doing this to be the richest broadband provider in the area,” says Ewing. “We’re doing it to make sure our members have an affordable, reliable option and that anyone in a little Arkansas or Oklahoma community has Internet just as good as someone in a city.”
The Conexon difference
Following quickly on the project launch, AVECC signed on with the Conexon-led electric cooperative consortium to participate in 2018’s Connect American Fund (CAF) II auction. The co-op was ultimately awarded $4.7 million over 10 years.
“The CAF II funding had a significant cash flow impact,” said Barret Ewing, Engineer and Operations Director for Wave Rural Connect. “It means less borrowing for the project, which is helpful for the cooperative from an equity perspective.”
The planning and regulatory support provided by Conexon during and after the CAF II has benefited the co-op in multiple ways.
“We don’t know what we don’t know,” says Lauren Robinson, Accounting and Finance Manager, so we didn’t always know the questions to ask. Having Conexon there to guide us through the process was very valuable.”
Funding and broadband experience and expertise aside, however, a few other factors came into play in the decision to select Conexon as consultant and strategic partner.
“Randy’s knowledge of co-ops can’t be overstated. He knows how co-ops function on a daily basis and he knows how to talk to the people in them,” says Fisher. “We didn’t get that with any one else. Plus, he understood the importance of providing broadband to 100 percent of members.”
Conexon’s role in AVECC’s broadband project ranges from network design and construction management services and in the future, will include network and call center support for customers. The range of the company’s competencies means Wave Rural Connect, currently with only four employees – has a complementary support team readily available. The co-op expects to bring the first members online in summer 2019.
Conexon is always behind us,” emphasizes Fisher. “We can call anyone any time and get the answers to our questions. Conexon is very much a partner, rather than vendor. They’re invested in the project and our success.”
Arkansas Valley Electric Cooperative Broadband 2019-2020
Arkansas Valley Electric Cooperative’s (AVECC) broadband launch has come with its share of learnings and lessons. Among the most welcome? The overwhelming enthusiasm of co-op employees at launching a new business and reinvigorating the co-op’s image.
"Our employee base has totally embraced the subsidiary (Wave Rural Connect) and our new mission of bringing members connectivity,” says Al Simpson, CEO, Arkansas Valley Electric Cooperative Corp. “While we weren’t surprised, we didn’t quite know how much it would strengthen and excite our team. It’s challenging and hard work, but our employees understand that what we’re doing is completely changing our communities.”
“Our teams have excelled at transitioning our co-op into becoming an excellent internet provider, while maintaining that same excellence on the electric side of the business,” adds Brandon Fisher, AVECC Technology and Communications Manager. “We asked people whose job for years had consisted of accepting payments to now make outbound calls and ‘sell’ service. They really stepped up and never skipped a beat.”
After announcing its intent and forming Wave Rural Connect in 2018, AVECC connected its first customer in mid-2019. By the end of the year, 550 members were connected and 650 miles of fiber built, with take rates meeting expectations at just over 13% in its densest areas. Today, the co-op has approximately 1,300 subscribers connected.
Part of the employee enthusiasm and resulting project success evolved from a sense of partnership created early on by the small team at Wave – seven dedicated employees – with long-time co-op employees in areas such as community events, customer service, billing and others.
“As an example, we could sit in a room all day and come up with a good process for billing,” says Lauren Robinson, Accounting and Finance Manager, “but you need to involve the people who have everyday experience with billing and customers before you know how well it will work. We encouraged the team to share their feedback and challenged them to come up with things we hadn’t thought of based on their experiences. That collaboration molded our final system and processes.”
Wave’s initial strategy was to focus on its densest territories – also its most competitive. During that early deployment, the co-op experienced some stalls as processes and workflows were ironed out to reduce the time from sign-up to connection. Advertising was initially delayed to avoid creating customer expectations that might not be met. The fact that take rates were largely meeting expectations in those competitive areas, even without marketing, boded well for future project progress. Wave implemented its marketing push in 4Q 2019, adding on to its successful outreach through community events meetings and outbound calling efforts.
The Next Wave of Success
Moving forward, the co-op expects to double the rate of construction in 2020 and anticipates even higher take rates as customers roll off competitor contracts and learn more about the service. The team continues to rely on Conexon to augment its knowledge and resources, specifically in areas such as funding. In 2018, the co-op participated in the Connect America Fund (CAF) II auction as part of Conexon’s rural electric cooperative consortium, and received $4.7 million in funding. Wave has joined the consortium again to compete for funds in the upcoming Rural Digital Opportunity Fund (RDOF) auction.
“Conexon has helped us across the board in multiple areas,” says Barret Ewing, Engineer and Operations Director for Wave Rural Connect. “We’re pleased with our progress, but we pride ourselves on working to be ‘great,’ not ‘good'. We’re focused on getting folks connected quicker and continue to be progressive with what we can offer members.”