Oct. 27, 2022 | InBrief

5 considerations for utilities when developing a PLTE business case

Looking to build a business case for modernizing telecommunications infrastructure? Start here.

5 considerations for utilities when developing a PLTE business case

Moving a Private LTE system through the regulatory process—and having a successful business case approved by regulatory commissions—is key to being able to build and implement a PLTE network. Historically, telecommunications were built into the business case for each specific use case or application that it supported—communications networks were purpose-built, SCADA communications networks went into the SCADA business case, and AMR/AMI communications went into the AMR/AMI business case.  

But PLTE is different—with the ability to provide communications for multiple use cases over the same network. Instead of having separate telecommunications networks for SCADA, Distribution Automation, AMR/AMI, and others, a PLTE network can provide communications for all these applications—and even future undefined use cases. 

Utilities no longer need to own and operate multiple, disparate communications networks. Here’s what to consider when building out your business case. 

Multi-purpose networks require more RF spectrum

Purpose-built networks previously used narrow channel spectrum leased from the FCC at a negligible cost. With PLTE and other next generation networks, that’s no longer the case. The spectrum now needed to transport information for multiple use cases can cost tens or even hundreds of millions of dollars—depending on the size and population of a utility’s service area. There’s a lack of consistency about spectrum being able to be put into rate cases because of utilities being regulated at the state level. Some utilities have put spectrum into their rate case while others haven’t. That stirs up confusion as utilities try to move forward with PLTE networks.  

Because of the higher cost and the fact that telecommunications were more or less hidden in business cases—and sometimes not even well known within the utility itself—education is required to help utility executives, commissioners, and regulators understand why and what utilities use telecommunications for and why PLTE networks have a higher cost and visibility within the utility. They must also understand the benefits of the new networks as well as the risks of not having a modern telecommunications network. 

Paramount to enabling modern grid capabilities is a modern network—one that has the ability to transport data for multiple use cases while having future use cases added without creating new or having to rebuild the telecommunications network. 

PLTE is in its infancy for utilities—for now 

LTE technology is not new, but PLTE is to utilities. Utilities in the U.S. have only had access to spectrum capable of PLTE since the middle of 2020. 

There are no real examples of utilities that have implemented PLTE—Southern Linc has built a PLTE network for its commercial service and provides communications over the network for Southern Company’s operations—and only a few have bought or leased spectrum and successfully gotten their business cases approved. 

But given the lack of availability of spectrum capable of PLTE, utilities can’t wait around for others to dive in first. RF spectrum is like real estate: Once it’s gone, it’s gone. And when it’s gone, those opportunities are lost. 

Additionally, many purpose-built networks are at or nearing end of life, putting utilities at a crossroads of needing to decide on the strategic direction of their telecommunications networks now. 

Steps for creating a successful PLTE business case 

Through consulting with commissioners and regulators, we’ve uncovered key items that should be considered and included to make a successful business case for modernizing telecommunications infrastructure. 

This process begins by talking with commissioners early on through a casual conversation about your utility’s plans. Understand what they’ll be looking for in a filing or rate case, and gain insight into their viewpoint to provide additional context or information in your actual filing. 

Ensure conversations about the upcoming request are not discussed with media, Wall Street, or others before they are discussed with the commission. To make a strong business case, utilities must: 

  1. Tell a clear story. Why is the investment needed? What value does it bring? Why is RF spectrum needed to deploy modern telecommunications networks? What are the alternatives? This will include commercial wireless alternatives in the case of PLTE.  
  2. Ensure the request is fair and a prudent investment. Will this investment save the utility money? What is the cost to the business of not making the investment? Is there an environmental benefit? What other intangible benefits are there that are good for the utility and society as a whole? 
  3. Consider the political environment. Are commissioners elected or appointed? Is there federal policy that affects the request? Federal policy supersedes state policy. Ensure you have adequate knowledge of federal policy. 
  4. Consider the use cases and specific technical updates the network will provide, including cybersecurity and physical security. What value does a more modern telecommunications network bring? Modern telecommunications networks and PLTE have security built in versus bolted on security of older purpose-built networks. Hackers are constantly trying to access utility networks, making the stakes incredibly high for protecting the grid. The costs for security breaches can be astronomical. Additionally, some use cases—such as AMI—may make the request easier for commissions to grant.
  5. Provide side-by-side comparisons. Including the cost to the business of “doing nothing” versus making the investment is essential. Explain the risks of certain technologies that don’t necessarily meet the utility’s needs. 

Having a comprehensive approach to a business case that clearly lays out the reasons the investment is needed along with any critical timelines will help ensure a successful business case and the utility’s ability to continue moving forward with modernizing the grid. 

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