MPW Moving Closer to Solar Installation and Diversified Portfolio; Pay Equity Study Yields Positive Results
Muscatine Power and Water (MPW) moved another step closer toward the inclusion of solar as part of the Utility’s proposed power portfolio transition. At Tuesday’s meeting of the Board of Water, Electric and Communication Trustees, the Trustee’s approved the $357,000 in application fees and study deposits associated with the review of the interconnection of MPW’s proposed 30 megawatt (MW) solar facility to the regional power grid — Midcontinent Independent System Operator (MISO).
The 2021 MISO Definitive Planning Phase (DPP) process requires an application fee, a study deposit, a milestone capacity payment and full project details for MISO to properly assess the project and provide MPW an executable generator interconnection agreement — bestowing MPW full network rights for the solar project.
Utilities across the nation are required to perform similar assessments when adding renewables to the power grid. The evaluation considers what, if any, transmission system modifications are needed to support the additional power on the grid’s infrastructure. Studies of this nature typically take a year to review. MPW must submit the application by July 2021 to stay on track for the proposed local solar project to be in service by the end of 2023.
MPW received several potential project sites and configurations as part of its recent RFP process, including potential use of MPW’s Grandview Avenue well field property.
“The addition of solar to MPW’s power portfolio aligns with our Strategic Plan to invest responsibly in renewable energy,” shared General Manager Gage Huston. “It is important to note that we still need customer support to make this project come together.” Huston continued that, “Very soon, we’ll be reaching out to customers to gauge support for a new program that would allow customers to secure renewable energy commitments by covering the direct cost premiums associated with this project.”
Although MPW’s proposed power portfolio transition, which includes the conversion from coal-fired generation to natural gas-fired generation along with significant expansion of renewables, has been widely supported, members of Progress Muscatine and Clean Air Muscatine (CLAM), supported by Iowa Beyond Coal in Des Moines and the Sierra Club headquartered in Oakland, California, oppose the new natural gas-fired unit MPW is investigating to replace its largest coal-fired generating unit, Unit 9.
Two CLAM representatives submitted a petition promoted on the Sierra Club’s website and signed by 51 people, to MPW Board Chair, Susan Eversmeyer. The petition asks MPW and the Board to cease consideration of the natural gas-fired unit. Instead, the interest groups are advocating the transition from fossil fuel generation to 100% renewable energy sources.
Chair Eversmeyer thanked the groups for sharing their perspective and petition with the Board and requested additional information and clarification of petition signers – specifically, how many signatures were from MPW electric customers. 51 signatures represent less than 1% of MPW’s residential electric customers. “We value input in this process and it’s important to ensure we understand the perspective of the broader customer base,” said Eversmeyer.
MPW’s customer forum from May provided information about what is driving current plans and the challenges associated with pursuing an all-renewable power supply, including the considerable costs. MPW set ambitious sustainability goals including reducing carbon emissions by 65% by 2030 and pursuing solar generation as part of its generating mix. It’s critical MPW balance its sustainability goals with the need for reliable and affordable service of which all its customers rely on.
“As a small, nonprofit municipal provider, you can be assured that both the Board and the staff at MPW are very committed to doing what’s best for our customers and Muscatine as a whole,” Eversmeyer assured the group.
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 Trustee’s reviewed recommendations to adjust the Utility’s current service rules to accommodate additional “‘behind-the-meter” generation installations. Behind-the-meter generation refers to the installation of energy generation resources, solar panels for example, at a customer’s location.
“We understand some customers desire to have renewable energy generation installed at their home or business – and MPW supports those efforts,” said Huston. “We continually evaluate our service rules to ensure MPW is being a good partner in supporting our customers desire to include renewables in their energy consumption.”
The proposed changes address the potential effect on existing MPW infrastructure and ensures there are no negative impacts to rates and minimizes subsidization.
The Trustee’s and MPW leadership also reviewed irrigation customer electric rates and related service rules to better align rate structure for seasonal, agriculture use. To strike a balance, staff recommended to develop a new rate class – Commercial II-Irrigation – that would essentially classify irrigation customers in the Commercial II rate class from May through September. The other seven months, irrigation customers would essentially be placed in the Commercial I rate class with no demand charge, when electric use is effectively zero.
“The usage patterns for these agricultural irrigation customers are very unique compared to other customers. Our focus was to provide a rate structure that is fair, equitable and balanced between the low demand of power on the system most months of the year and a much higher demand over a few months,” shared Director of Finance and Administrative Services, Mark Roberts.
The Trustees were given information about two significant approaching environmental regulations, Effluent Limit Guidelines (ELG) and 316(b), impacting MPW’s existing generating units. Both regulations fall under the federal Clean Water Act, established in 1972.
ELG set standards for wastewater discharged into surface waters of the US and covers everything from parking lot drains to waste treatment plants. The 316(b) rule regulates cooling water intakes and the requirements to minimize adverse impacts on river biology. Both these regulations will have significant impacts on MPW’s existing generation assets. Staff discussed compliance strategy options with the Board. No formal action was needed by the Trustee’s at this time.
An update on the restoration of Well 47 was provided to the Trustees. After multiple efforts, the vendor was able to increase Well 47’s output from a baseline of 620 gallons per minute (gpm) to 1,080 gpm, a nearly 75% increase in output. This output equates to roughly 1.5 million gallons per day. At this time, the contractor and MPW water department staff’s opinions are the well’s production rate has hit a plateau. Significant work may improve the output, but the returns would likely diminish. Although full capacity output of 1,500 gpm was not realized, staff is satisfied with the contractor’s efforts and results given the condition of this well when the effort commenced.
Water Utility staff is working diligently to get the well’s final connections to the system completed. The well will be put into service as soon as possible, easing concerns about meeting summer water demand.
Director of Legal, Regulatory and People Services, Brandy Olson, updated the Board of Trustees on a pay equity study recently completed. Pay equity assessments are not required for companies; however, as a proactive step, Olson advised the HR team to engage a consultant to take an objective look at MPW’s compensation practices.
Overall the assessment affirmed MPW pay practices are solid, with employees being compensated appropriately based on level of position and experience regardless of gender. The study did offer some insight about where MPW is in regard to workforce diversity and identified future opportunities to attract diverse and talented applicants.
An objective for MPW, Olson noted, is to continue to diversify the MPW workforce not only in terms of race but having more qualified female candidates in historically male dominated
roles. “We’ve made strides in diversifying our workforce, and to introduce more potential candidates to MPW, we offer internships – we have 9 interns this summer; 4 of them female – participate in career fairs and advertise our great career opportunities on our website.”
In other Board action, the Trustees:
- Elected Board Officers for 2021/2022: Steven Bradford Chairperson; Kevin Fields, Vice Chairperson; and Brenda Christensen, Board Secretary
- Presented Revised Board Policy Manual for Review
- Ratified Contract Change Order No. 2 and Final Acceptance for the FTTH Premise Installation for MDUs (multiple dwelling units) and Large Commercial Facilities Project.