At Tuesday’s Board of Water, Electric and Communications Trustee’s meeting, the Board took
additional steps toward expanding the Utility’s renewable energy portfolio by authorizing
General Manager, Gage Huston, to enter into a land lease agreement with Blackhawk Capital
Investments, LLC. Once the lease is executed, assessments can begin to determine the
suitability for a solar development.

This lease is the latest in a series of lease agreements the Utility is pursuing to evaluate
additional solar generation for Muscatine. MPW is already committed to building a 24-megawatt
(MW) solar farm – dubbed Muscatine Solar 1 – on 250 acres of land near the Grandview
Avenue and Hwy 61 intersection. That project has been delayed as MPW seeks Midcontinent
Independent System Operator (MISO) approval of the interconnection of that capacity to the
MISO grid. The Utility is considering additional sites for possible future expansion of its
renewable energy portfolio.

The newest land lease – in conjunction with Muscatine Solar 1 – provides an opportunity for
MPW to have up to approximately 88 MW of solar capacity. The possible expansions in
renewable energy align with MPW’s Powering The Future initiative, which seeks to sustain a
reliable, low-cost and more sustainable power supply for Muscatine.

The Board approved a revised project summary form for an emergency generator replacement
for the Utility’s administration and operations center for a total cost of $315,900. The cost
increase is attributed to a change in the fuel tank design due to limited existing fire protection,
and a sharp increase in material costs.

The emergency generator at this location is part of a redundant power supply configuration that
serves critical utility equipment, including electric and water system controls and
telecommunications (internet, video, phone) delivery equipment. The existing generator –
installed in 1980 – has reached the end of its useful life and is recommended for replacement to
maintain power supply reliability.

The Utility will be commemorating Public Power Week, October 6-12, through various public
awareness activities. Sponsored by the American Public Power Association, the week-long
recognition is designed to honor municipal utilities and highlight the benefits public power
provides communities across the nation. Additional details will be available via the Utility’s
customer newsletter, social media, and MPW’s website.

MPW will once again be participating in the annual Community Block Party, scheduled for
Friday, September 13 at Discovery Park. Educational, fun activities will be offered by many local
organizations designed to inform the community about resources and services available in the
area. For the 2024 event, MPW will enhance its presence with the “MPW Fun Zone.” In addition
to the popular bucket-truck rides, Mr. Sparky and energy bike demonstrations, utility volunteers
will provide a “fix a water main” demonstration and activity, spinning prize wheel and a photo
booth with props offering.

MPW’s net income for the month was $441,000, outperforming budget ($6,000). The Electric
and Communications utilities performed better than budget; however, the Water utility
performed worse than budget ($177,000) due to lower sales (gallons) and the timing of
expenses for well and related pumps refurbishment. Weather was a partial driver for both lower
water and lower electric sales; wet and mild weather limited residential and commercial water
used during the month, and July on average was cooler than June, which reduced residential
electric sales.

In other business, the Trustees:

• Ratified payment of July 2024 expenditures and transactions totaling $8,924,033.94

At the July Board of Water, Electric and Communications Trustee’s meeting, Muscatine Power and Water (MPW) senior leadership presented second quarter results from the Utility’s updated 2024-2026 Strategic Plan and welcomed a new Trustee to the board.

The strategic plan update highlighted MPW’s success in securing an impressive $4.25 million in grant dollars for infrastructure upgrades and equipment replacement. The grant dollars will not only help MPW address current system vulnerabilities but will allow the Utility to adopt advanced technologies, enhancing efforts to fortify assets against potential power disruptions.

“Securing these grants has been a tremendous achievement for MPW and is a testament to our team’s forward-thinking plans to invest in Utility infrastructure,” shared General Manager, Gage Huston. “The funding will help us to maximize dollars in modernizing our systems and will go a long way in strengthening MPW’s power transmission and distribution network to ensure the consistent delivery of power customers depend on.”

Also included in the grant dollars is funding to support MPW’s fiber service area expansion. Currently, the expansion projects – NOFA #006 and NOFA #007 – are in progress and target areas of Iowa classified as unserved or underserved by the Federal Communications Commission (FCC) for broadband service.

While some projects are already underway, the bulk of the work will start in 2025 and will be completed in the coming years.

Other updates included the Utility’s response to feedback provided by a customer survey completed in November 2023. Focus group participants are currently being solicited to gain in-depth insight into customer experiences and perspectives. Customers interested in participating are encouraged to contact the Utility by emailing mpwsurvey@mpw.org.

The Trustees and senior leadership welcomed a new member to the Utility Board, Tammi Drawbaugh. Drawbaugh was confirmed by the Muscatine City Council to fill the position previously held by Tracy McGinnis. Huston said “Tammi brings a unique set of skills and insights that align with the Utility’s strategic goals. We are confident her leadership and expertise will greatly benefit MPW as we continue to navigate the evolving landscape of the utility industry.”

Huston thanked and commended McGinnis for her time serving on the board. “Over the last 12 years, Tracy played a pivotal role as MPW undertook several significant projects and initiatives, and always represented the best interests of customers. We all wish Tracy the best in her future endeavors and thank her for her contributions.”

A partnership between the City of Muscatine, the Greater Muscatine Chamber of Commerce and the Utility will provide new holiday lighting and decorations for the downtown area this season. The new decorations will replace the pole-mounted wreaths placed along several downtown streets each year. Purchased in the mid-1980s, the wreaths’ colors are fading, and the wiring is deteriorating. Although the wreaths have been repaired multiple times, the decision was made to update and replace the decorations.

The partnership is consistent with past arrangements to share the cost of new holiday decorations. Half of the new decoration costs will be paid by MPW with the remaining half split between the City and the Chamber. The total cost of the decorations is $23,961.

Like three of previous five months this year, June Electric Utility net income was significantly favorable to budget. Electric Utility net income was $1.7 million favorable in June and $4.8 million favorable for the year-to-date. As a result of the Electric Utility performance, MPW net income of $0.6 million was $1.6 million favorable in June, with the Water Utility being $153,000 unfavorable to budget primarily due to timing and the Communications Utility being $49,000 favorable. For the year through June, the Water Utility was $0.4 million favorable and the Communications Utility was $0.5 million favorable.

In other business, the Trustees:

• Ratified payment of June 2024 expenditures and transactions totaling $9,245,044.
• Set Tuesday, August 27, 2024, at 3:28pm for public hearing to receive comments from the public on MPW’s Annual MISO Transmission Rate Update.
• Approved the revised/updated 2024 Board Policy Manual.

Muscatine Power and Water’s Powering the Future initiative reached a milestone at June’s Board of Trustees meeting. In a decisive move to enhance the community’s long-term electric power needs, the Board of Trustees approved the purchase and installation of a state-of-the-art combined heat and power (CHP) unit. The Trustees unanimously voted in favor of integrating the CHP unit, referred to as “Unit 10” or the “Project,” into the Utility’s power generating resources. The Project, approved at an estimated net investment of $85M, compares to $240M invested in the early 1980’s for the construction of Unit 9.

This critical decision underscores MPW’s commitment to delivering reliable and affordable electricity. Unit 10 will serve as another piece of MPW’s Powering the Future initiative, which also includes the development of a 250-acre solar farm scheduled for completion in 2026. By simultaneously generating electricity and thermal energy, the CHP unit is not only efficient, but highly effective in reducing operational costs and emissions. In addition, combined heat and power projects are encouraged by the EPA, the Department of Energy and the Iowa Economic Development Authority due to their efficient use of energy.

Specific benefits of the CHP Project include:

Reliable

• The Project will supply another local source of energy for the Muscatine community.
• The Project provides reliable capacity, which helps support renewable energy sources and power purchase agreements.
• The Project will provide MPW with the capability to supply reliable electricity around the clock and the flexibility to accommodate future technologies.

Affordable

• The Federal government’s stringent environmental regulations for coal power plants will require additional investment and ongoing expenses for existing units to keep them working as coal-burning generators. A new CHP unit will not have the same costs.
• The Project maintains MPW’s diversified supply of electricity, by both generating electricity at its power plants and buying electricity via the open market. 

Flexible

• The small generating capacity of the CHP unit keeps options for other types of generation to be added to MPW’s portfolio as its coal plants are retired.
• The Project supports MPW’s solar power purchase agreement to use renewable energy alongside cleaner energy from a natural gas generated baseload.

Sustainable

• Natural gas power plants produce lower emissions and greenhouse gases than coalburning generating stations, making them a cleaner source of electricity than coal.
• Unit 10 will include the latest safety technologies and meet all the latest emission standards for a power plant.
• A continued decline in MPW carbon dioxide emissions is expected following the future cessation of coal burning at Unit 7 and 8 generating stations.

MPW began researching alternate energy sources for power production in 2020 with the completion of a power supply study. Leidos Engineering, industry experts for energy programs and projects, conducted the study of future power supply scenarios. Twenty different portfolio scenarios were evaluated over multiple market cases, resulting in nearly 4,000 iterations of potential outcomes.

A scenario from the study that provided the best overall results included the development of a CHP unit as part of a strategy to phase down the use of coal, diversify MPW’s power generation portfolio, and maintain its award-winning reliability. Over the past few years, MPW staff have completed additional analysis on a CHP unit and refined the size and scope of the project to best fit Muscatine’s needs.

MPW also plans to take advantage of direct pay tax credits for this highly efficient project that became available through the Inflation Reduction Act of 2022 (IRA). Though MPW is a taxexempt entity, the IRA allows for direct reimbursement of a portion of the project costs as a way to encourage and facilitate the expanded use of CHP technology. This credit is estimated to be worth $10 to 13 million, saving MPW’s customers millions of dollars on the project.

Recent customer survey results emphasized the community’s strong preference for reliable and affordable energy over prioritizing renewable energy resources. Conducted in late 2023, the survey revealed that while many are in favor of incorporating renewable energy, a significant majority of respondents expressed concerns paying higher rates that would accompany a wider adoption of renewable sources.

“These findings reflect the community’s need for thoughtful and creative energy solutions that don’t overburden our customers unnecessarily,” continued Huston. “MPW’s decision to integrate a CHP unit into our Powering the Future project will address these key customer priorities by ensuring a diverse power supply portfolio while holding down the rates they pay.”

The addition of the CHP project to MPW’s portfolio is expected to have a small impact on customer rates. The project is expected to increase an average residential customer’s bill by less than a dollar per month. However, increased regulations on other resources are likely to have larger impacts on customers’ bills in the coming years.

“We are excited to move forward now that the Board has approved the CHP unit and authorized MPW to finalize negotiations and execute a new steam sales agreement with Grain Processing Corporation (GPC),” shared MPW’s General Manager, Gage Huston.

MPW reported that, similar to prior steam sales agreements, this will provide mutual benefit to both GPC and all MPW electric customers.

“Throughout the negotiations, I was truly impressed by GPC’s focus on ensuring this project was the right solution for all MPW customers.” Huston added, “GPC has a focus on seeking winwin solutions with their partners and you could definitely see that philosophy come through during this negotiation.”

The sale of steam from the new unit will provide margins that go into covering MPW’s operating costs. This Project achieves MPW’s reliability needs at a lower net cost than any alternative.

“In keeping with our core value of embracing sustainability, while seeking a balanced blend of technologies to meet system needs, the addition of solar into MPW’s energy portfolio makes sense,” shared Huston. “Decreasing our carbon footprint will have a positive, lasting impact on the environment. Significant interest from industrial and large commercial customers enabled MPW to add solar without passing incremental costs to residential customers and small
businesses.”

In November 2022, MPW announced its first utility-scale renewable project in Muscatine and entered into a Power Purchase Agreement (PPA) with Nokomis Energy for the Muscatine Solar 1 project. Solar 1 also supports MPW’s ambitious sustainability goal of reducing carbon emissions by 65% by 2030.

Since 2017, MPW’s wind portfolio has provided about 5.5% of local customer electric energy needs. Solar 1 would more than double the renewable energy in MPW’s portfolio to an estimated 11-12% once the project goes into service.

Construction on the 24,000-kilowatt solar installation at MPW’s Grandview Avenue Wellfield is anticipated to begin in fourth quarter of 2024, with an operational target of 2026. MPW had planned to have the project in-service sooner, but delays by the regional electric grid operator have pushed that project out.

MPW customers are encouraged to submit questions about the Powering the Future project via email at powerthefuture@mpw.org.

In other Board business, the Trustees:

• Approved the project summary form for Isett Substation Expansion Project at the amount of $252,500.
• Approved the revised/updated Customer Service Rules for Water, Electric and Communications Utilities.
• Approved a resolution recognizing Tracy McGinnis for years of service as the Board of Trustee of the Board of Water, Electric and Communications of the City of Muscatine, Iowa.
• Approved the recommendation to elect 2024/2025 Board Officers and approve 2024/2025 Board Committee appointments.
• Reviewed May financial results, which were stronger than expected with MPW net income of $123,000 versus a budgeted loss of $1.3 million.