At the July Board of Water, Electric and Communications Trustee’s meeting, the Board accepted as complete Atlantic Engineering Group’s (AEG) contract for construction of the Fiber to the Home (FTTH) project at the final price of $8.6 million.
Construction on the project, which began in the spring of 2017, was impacted by a series of setbacks caused by weather, integrating the new fiber cabling into existing operational infrastructure, labor shortages, and COVID-19. Despite the obstacles, the total project expense remained under the approved revised budget and is expected to remain very close to the approved expenditure when all Muscatine Power and Water’s (MPW) work is complete.
“All MPW efforts — projects or services — are designed to bring the best possible offerings to our community,” shared General Manager, Gage Huston. “Fiber optic internet is cutting edge technology. It’s more reliable, faster and more secure than coax. The investment and completion of the FTTH project designates Muscatine as a gigabyte city — making Muscatine more appealing for business and industry to locate here, and also supports workers who choose to live in our great community and have this amenity available to them.”
Since fiber construction has completed, reliability stats have inched up, as expected. Staff reports first quarter system reliability was 99.91% and second quarter improved to 99.99%, which is on par with MPW’s Electric Service award winning reliability performance. The MPW Communications team continues with behind-the-scenes maintenance and network enhancements to maintain that high system reliability.
The next evolution of the fiber project is the gradual expansion of its communication service area to rural areas adjacent to its existing service area. Construction to extend fiber services to the Rolling Meadows subdivision is expected to begin in August.
MPW is also investigating expansion opportunities that may be partially funded with state grants. Supported by the State of Iowa Office of the Chief Information Officer, funding is available to telecommunications providers to bring cost-effective access to high-speed internet services in underserved and unserved areas.
“We live in time when connectivity is more essential than ever,” said Erika Cox, director of customer and technology experience. “MPW is providing area residents with state-of-the art fiber
services, but we know our outlying neighbors would appreciate us extending the service. We commend Governor Reynolds’ forward-looking goals to make at least 100 Mbps internet speeds available to all Iowans. That’s a perfect fit with our fiber service!”
Staff presented the Board with a draft Choose Green Muscatine—Business Program, a program designed to help MPW commercial and industrial customers fulfill sustainability goals by meeting a significant portion of their electricity needs from local renewable generation. Several businesses have expressed interest in local renewable energy options to satisfy their corporate sustainability goals. This interest also supports MPW’s generation diversification. In response to customer interest, MPW staff have developed the Choose Green Muscatine—Business Program, allowing customers to directly purchase renewable energy from MPW’s growing renewable energy portfolio.
“Direct participation in long-term, high-volume projects, such as MPW’s proposed solar installation, will provide stable renewable energy options and promote the expansion of local renewable energy,” said Huston.
In 2020, about 5.4% of MPW’s customer electric energy needs were met from MPW’s wind portfolio. An estimated 7% would come from a future 30 MW solar installation, increasing MPW’s renewable energy production to over 12% of its total customer electric energy requirements.
The solar installation, expected to be constructed on the Utility’s Grandview Wellfield location, will support MPW’s own ambitious sustainability goals that include reducing carbon emissions by 65% by 2030.
Huston provided the Trustees information about all-source RFPs. The Sierra Club, a national environmental group, has suggested MPW conduct an all-source RFP in its exploration of generation options. Huston explained that while all-source RFPs are presented as a fair and open way to compare proposals for projects, they do not replace comprehensive power supply planning and do not take into consideration Muscatine’s unique power supply needs.
“All-source RFPs are not studies,” shared Huston. “They can be used to supply information into a comprehensive power supply study to validate – or refute – assumptions. Trying to do portfolio planning by simply extrapolating data from an all-source RFP would be a mistake and not responsible planning.”
Staff provided in-depth updates to the Board regarding progress on MPW’s Powering the Future initiative. Solar developer, Ranger Power, has been identified as the finalist for MPW’s new proposed solar project. The site will be on MPW’s Grandview Avenue Wellfield, utilizing existing land owned by MPW. Long-term commitments for energy from the local solar project will be solicited from large business customers via MPW’s new Choose Green Muscatine – Business Program. Achieving commitments for the energy output of the solar project will help ensure the project can move forward. Negotiations for a power purchase agreement with Ranger Power are expected to conclude by the end of the year. The Board is expected to take action at the August meeting to set the retirement date for Units 7, 8, and 8A (Plant 1) and setting an environmental compliance strategy for Unit 9. Either option make a retirement of Unit 9 a likelihood by the end of the decade. Replacing the capacity from Unit 9 is expected to come from a combination of
expanded renewable energy and a smaller scale natural gas-fired unit that can produce electricity and process steam. This strategy also leaves a portion of MPW’s generating portfolio “open” and gives MPW flexibility to add more renewables if those come down in price or other clean technologies as those become available.
Clean Air Muscatine (CLAM) representative Sandy Stanley and Katie Rock, Beyond Coal representative from Des Moines, presented MPW’s Board with additional signatures supporting the Sierra Club’s petition that MPW cease consideration of a natural gas-fired unit to replace what will be its remaining coal-fired unit, Unit 9, by the end of the decade. Review of the 50 signatures from the statewide petition submitted at the last Board Meeting positively identified 16 names as actual MPW electric customers (16 signers represent 0.1% of MPW electric customers by meter count). For the last 60 minutes of the Board Meeting, MPW Staff and Board listened to comments from the visitors and engaged in question and answers about MPW’s power supply transition.
MPW has started customer engagement activities as well, with their findings showing that customers place highest value on Reliability and Affordability when it comes to their electric service. “This aligns with what I would expect to hear from most of our customers. I have the unique perspective of seeing customer interactions – it’s immediate contact for outages, if we have one. Customers appreciate the quick response from our crews when it’s an outage with our power lines. Extended outages from intermittent resources would be an unwelcome reality for our customers. We also interact with a larger percentage of customers than you might imagine about their monthly utility bill – either us reaching out to them, or customers contacting us for payment extensions or options. That would get significantly worse if, according to our analysis, rates were to double with the 100% renewable option that is being advocated,” Cox shared during a quarterly update on MPW’s Power the Future initiatives.
The Trustees were brought up to date on the progress to bring geographic information system (GIS) and the Muscatine Area Geographic Information Consortium (MAGIC) staff under the MPW umbrella.
Both services have brought significant value in streamlining work and adding efficiencies in a multitude of MPW processes. Staff has recommended to the MAGIC board of directors a change in how the MAGIC employees are managed – bringing the two employees in as full-time MPW employees in their current roles. This change would provide several benefits to both MAGIC employees and MPW while maintaining the same level of service and support to the City of Muscatine, Muscatine County and the Utility.
The proposal received strong support from each entity with a vote expected in early August to adopt the changes.
MPW reported net income of $510,954 for the month, which was a result of the Electric, Water and Communications utilities each having positive net income, respectively $236,905, $138,815 and $135,234. Halfway through 2021, net income for MPW was $2,286,669, $6,091,149 above budget. Mark Roberts, director of finance and administrative services, said “excellent electric wholesale margins (especially resulting from February’s cold spell), lower pension expenses and depreciation, and continued MPW diligence to hold down expenses have resulted in a strong first half of 2021.”
In other Board action:
- Ratified Contract Change Order #3 for a decrease of $1,044,396.38 for the Construction of the FTTH System
- Accepted AEG contract as complete at the final price of $8,651,221,01 and pay the remaining contract retainage thirty-one days for the Construction of the FTTH System, subject to receipt of appropriate lien waivers
- Approved the revised Project Summary Form for the West Hill Sewer Separation Project Water Main Replacement – Phase 5 with a total cost of $290,100
- Set August 31, 2021 at 5:28pm for a public hearing to receive comments from the public on MPW’s Annual MISO Transmission Rate Update
- Approved the recommended Commercial II Irrigation rate structure and revised MPW Service Rules
- Approved the recommended Revised and Expanded Net Metering rate structure and revised MPW Service Rules and Board Policy