At the monthly Board of Water, Electric and Communications Trustees meeting, the Board was provided a summary of Muscatine Power and Water’s (MPW) Customer Appreciation Day held on Saturday, June 18.
The event attracted nearly 600 guests to learn about utility service delivery through interactive displays, equipment demonstrations and hands-on activities. New this year were pole-climbing and water main repair activities and a generation tour (to locations for MPW’s future solar field and displays at the Power Plant).
Attendees had many positive comments, with many expressing the displays were educational and informative in a way that created a better understanding of the value MPW provides to the community. Erika Cox, director, customer & technology experience stated, “We were pleased to offer the community opportunities to learn what work is involved to deliver reliable and affordable utility services, let folks get hands on in some of the specific work we do, and to share more about our Powering the Future plan. The day was beautiful, and all who came out had fun.”
General Manager Gage Huston provided an overview of the results from a recent transmission planning study. Transmission planning studies weigh current and future grid infrastructure, power demand (load) and generating resources against anticipated load growth to determine appropriate local generation output to maintain regional system integrity and reliability. These studies are fundamental to strategic and contingency planning for utilities across the nation.
As a result of decreasing availability of power generation from neighboring resources upon which MPW partially relies, the study revealed MPW’s local generation requirement more than doubled from the 2021 study estimate. Changes in transmission flows also affect the local generation requirement. Consequently, senior leadership recommended increasing the local generation requirement for planning purposes.
“Identifying vulnerability in contingency scenarios is why transmission studies are conducted,” shared Huston. “The most recent study uncovered scenarios in which MPW must have certain levels of local, dispatchable generation to compensate for regional generation outages or retirements.”
The study results directly affect the Utility’s current update of its power supply study. There is a need for more local, dispatchable generating capacity than what was previously planned.
“MPW staff and our industry expert partners are still working through the details that will be provided once the power supply study update is completed,” stated Huston. “However, the findings from the transmission study were important to share now to illustrate the fluidity of the energy industry landscape and how important it is for MPW to remain flexible in changing times.”
In May, the Trustees approved a reactivation and restructuring of the electric utility’s Energy Adjustment Clause (EAC). EACs are designed to provide stability to utilities and benefits to customers when fuel and net purchased power costs differ from levels upon which electric rates are set. These costs, especially purchased power costs, can be volatile. Mark Roberts, director of finance and administrative services, stated “we have seen very high average prices and volatility in wholesale power markets, which is why we reactivated the EAC. “
MPW further refined the parameters of the EAC based on continued evaluation of the future energy market and in response to the volatility of energy market prices. The lower threshold was reduced, which affects when credits are applied. The EAC approach is the same, in that there will be no EAC applied when net costs fall within a predefined range. Costs below the adjusted lower threshold will result in a credit to customers, while costs above the higher threshold will result in a charge to customers.
“Developing thresholds provides protection for MPW’s customers. When MPW’s net energy costs are favorable, customers will see a credit, when our net energy costs are high, a charge will be applied. This structure benefits customers and the Utility,” according to Roberts.
The Utility has not been immune to supply chain bottlenecks or increases in material costs. Three projects went before the Trustees to approve revised budgets that reflect the increased costs for materials required to complete utility work. “The price of doing business is increasing,” stated Huston. “The projects MPW planned cannot be delayed because they directly affect the ability to provide reliable utility service. Postponing any of these projects could cause an interruption in service, and the costs would likely be even higher to do the work later.”
The Trustees approved the revised project budgets for the following projects: 900 Block of Mulberry Avenue Water Main Replacement ($166,100); Absorber Feed Tank Liner Repair Project ($414,400); West Hill Rectangular Reservoir Repairs Project ($174,700).
Roberts also reported on MPW’s financial results for May. MPW had a $377k loss for the month, but that loss was $576k better than the budgeted loss. For the year through May, MPW had a small $8k loss, which was $1,490k better than planned. Roberts noted, “May’s good financial performance was a result of cautious management of the Electric Utility’s position in the wholesale market during a month when average non-wind wholesale electricity prices of 7.4 cents per kWh were almost 3 times higher than they were in May 2021.”
In other Board action, the Trustees:
- Approved Customer Service Rules for each utility,
- Received and placed on file the certificate of appointment for Keith Porter to the Board of Water, Electric, and Communications Trustees of the City of Muscatine, and
- Elected Board Officers for July 1, 2022 through June 30, 2023: Kevin Fields, Chairperson; Keith Porter, Vice Chairperson; Brenda Christensen, Board Secretary.