At the January 30 meeting of the Board of Water, Electric and Communications Trustees, Muscatine Power and Water (MPW) senior leadership provided a progress update on the Utility’s Powering the Future initiative. The multi-year project, a result of research and collaboration with industry experts, will transform how electricity is generated for the Muscatine community.

The delay in the Midcontinent Independent System Operator’s (MISO) evaluation of the interconnection of MPW’s Muscatine Solar 1 project to the MISO bulk electric system has resulted in a compression of the schedule. Due to the large backlog of projects in MISO’s interconnection queue, this aspect of MPW’s 24-megawatt solar project has been delayed several times. The delays resulted in the need to amend certain terms in the power purchase agreement and solar site lease and easement agreement.

The Board approved the General Manager’s authority to enter into amended agreements with Nokomis Energy, the Utility’s partner in constructing Muscatine Solar 1. These amended agreements will solidify the path toward timely completion of the project once final approvals are received from MISO. The solar array is anticipated to be commercially operational in late 2025 or early 2026.

“While it’s frustrating the MISO queue isn’t moving as fast as we would like,” said general manager, Gage Huston, “team members are continuing to push forward with the research and analysis necessary to ensure the Muscatine community has the energy needed for today, and the capacity to meet tomorrow’s energy demands.”

In other action related to Powering the Future, the Board approved a revised project summary form (PSF) for the combined heat and power (CHP) unit for engineering preliminary design and project definition. The original PSF was approved at $545,000. That approved work was to do the initial preliminary design. However, based on the current positive state of the project investigation, MPW staff requested an expansion of the PSF scope to include more detailed project engineering and additional funds to ensure that if the CHP project is approved, the project can be initiated quickly enough to qualify for Inflation Reduction Act direct pay tax credits. Those additional expenditures include environmental permitting, Iowa Utilities Board application filing, soil boring, site survey and steam customer water testing. The revised PSF expenditure limit is $1,430,000.

“A transformational project like Powering the Future takes years of planning, research and analysis,” shared Huston. “Although it takes a while for the public to see progress with big projects, the work done behind the scenes is positioning the Muscatine area for decades of future growth with reliable, affordable, flexible and sustainable energy resources.”

The Board reviewed December 2023 and calendar year 2023 financial results. Mark Roberts, finance and administrative services director, reviewed a significant adjustment to MPW’s accounting for future decommissioning costs for the power plants. The change was made to a more comprehensive estimate of future costs and a revised anticipated retirement date for Unit 9. The result was a significant reduction to 2023 decommissioning expense to $1.6m. Roberts stated, “The estimates of future decommissioning costs and retirement dates will be periodically examined and a new study of those costs is planned for 2024.”

Along with other financial results in December, the preliminary and unaudited calendar year net income for the three utilities and MPW in total were as follows:

a table with numbers referencing electric-water-communications 2023 vs 2022 over/under budget

Staff also presented the results of fourth quarter progress on the 2021-23 Strategic Plan and calendar year key performance indicators.

In other action, the Trustees:

  • Approved payment of December expenditures and transactions of $10,662,654
  • Set dates for receipt of bids – February 27, 2024, at 2:00 p.m., and conduct a public hearing – March 28, 2024, at 5:28 p.m. – for the West Substation Utility Building Project
  • Approved the Communications, Electric and Water Utility Reimbursement Resolutions
  • Approved a change in dates to the March 2024 and December 2024 Board Meetings to March 28, 2024 and December 19, 2024
  • Entered closed sessions for the purpose of discussing competitive information related to Muscatine Solar 1 power purchase agreement, the CHP unit and associated potential steam sales agreement in accordance with Iowa Code 388.9
  • Entered a closed session for the purpose of discussing a corporate network outage in accordance with Iowa Code sections 21.5(1)(k) and 22.7(50)