During Muscatine Power and Water’s (MPW) monthly Board meeting on Tuesday, General Manager, Gage Huston, offered a statement of appreciation for the staff at the Utility’s generation site. Recent high temperatures required all units – Units 7, 8 and 9 – to be online to help stabilize the bulk electric system.
“I want to express my sincere appreciation to each and every member of our generation team who worked relentlessly in scorching temperatures to keep all MPW’s units running,” shared Huston. “Their work supported the stability of the bulk electric system and helped ensure our community had uninterrupted services. The Generation staff’s commitment showcased the remarkable spirit that defines MPW, and I am grateful for their exceptional dedication.”
The extended high temperatures emphasize the importance of dispatchable generating resources as the backbone of the bulk electric system. The increase in renewable, non-dispatchable energy coupled with the decommissioning of many fossil fuel units has created a tightening of reserve capacity during periods like last week, where demand is extremely high but wind generation is way down. Dispatchable resources like those at Muscatine’s power plant help fill the gap to ensure everyone has the electricity they need.
Huston concluded, “The Trustees are also to be commended for their foresight in delaying the retirement of Plant 1 (Units 7 and 8). The deferment has protected MPW customers from risk during a time of grid reliability concerns and high market prices.”
Plant 1’s retirement was deferred in May 2022. Currently, the units serve as “peaking units,” limiting operations to times of high energy demand and potential grid instability.
The Trustees were also provided an update on the Utility’s recent community outreach efforts including National Night Out, RAGBRAI, and a supply drive for the local domestic violence shelter. Huston shared, “MPW is not just a utility service provider, it’s a vital thread in the fabric of our community. Participation in outreach events and community initiatives makes Muscatine stronger and creates a sense of belonging, trust and shared progress.”
During the meeting, Doug White, director of power production and supply, provided an update on a series of significant regulatory proposals from the Environmental Protection Agency (EPA), targeting fossil fuel-fired power plants. While most of the proposed regulations will not be finalized until sometime in 2024, MPW staff have completed an initial analysis of the potential impacts to MPW’s plant. White highlighted the complexities of analyzing the impacts of multiple regulations with different compliance alternatives and different compliance timelines. Stakeholders from many sectors have provided feedback on the proposed regulations. In particular, the proposed Power Plant Greenhouse Gas Rule has received critique from several power grid operators, including the Midcontinent Independent System Operator (MISO), which operates the power grid in much of the Midwest. MISO and other grid operators expressed concerns about the impact on dispatchable generation resources and the resulting impact on system reliability.
Mark Roberts, director of finance and administrative services, noted MPW’s operating margins of $1.7m were $0.5m below budget as Unit 9 was unavailable for almost one-third of the month, although the unit was online when temperatures were at their highest. Compared to June 2022, operating margins were $2.1m below June 2022 when market conditions were entirely different and wholesale market prices were high. Roberts stated, “operating margins are an important way to view results because MPW is making adjustments to expenses to recognize changes to depreciation and asset retirement obligations that further increases non-cash expenses.”
In other Board business:
- Approved payment for the July 2023 expenditures and transactions.
- Approved a resolution requesting the Mayor and Muscatine City Council designate October 1-7, 2023 as Public Power Week.