At the first 2022 Board of Water, Electric, and Communications Trustees meeting, the Board was presented with findings from an economic feasibility study prepared by Stanley Consultants, Inc. (SCI) for a combined heat and power (CHP) natural gas-fired unit. The CHP unit was a preferred option in a 2020 power supply study due to its efficient design. SCI’s evaluation provided a more in-depth examination of various CHP options for Muscatine.
The study included the evaluation of numerous combustion turbines in multiple configurations, providing an overview of operational efficiency and financial performance. Thermal and financial performance along with vendor information was used to refine the results. The most favorable configurations in each phase advanced through the process.
The next step in the evaluation process will be to re-run the power supply study using SCI’s evaluation results, updated renewable energy resource costs, environmental cost assumptions and the most current market projections.
Tom Mergen, Vice President with Stanley Consultants, Inc. and whose team has been working the CHP analysis with MPW staff, offered his perspective. ” We work with utilities across the country on projects similar to MPW’s. Consistently, we see municipal utilities take a strategy like what MPW is doing – right size their generation resources, have a dispatchable resource (e.g., a fueled unit) along with a component of renewable, and keep options open for new developing technologies, ” shared Mergen. “MPW is looking at this correctly. Furthermore, when viable, the CHP unit can pivot to burning hydrogen for a fuel source. This enables MPW to be nimble as the energy industry continues to evolve.”
“We are very methodical in the evaluation process,” shared General Manager, Gage Huston. “No matter the determination, it will influence Muscatine’s energy production for decades. The complexity of the Powering the Future initiative, along with MPW’s commitment to provide reliable, low-cost energy warrants staff scrutiny at every level.”
No Board action was taken. The power supply study re-run results are anticipated to be received in 2Q 2022.
In a proactive decision, the Trustees approved the advance purchase of aerial bucket trucks and digger derrick units. The current crisis in the global supply chain has pushed lead times for utility vehicles, exceeding 30 months in some instances. Typically budgeted on an annual basis, the aerial bucket trucks and digger derrick units are necessary assets for utility work.
The vehicle purchases were included in the latest 10-year financial projection reviewed with the Trustees in October 2021. Since then, the total cost for the utility vehicles has increased by nearly 17%. The vehicle purchases will be added to the budget years in which they are expected to be delivered, and the next issue of the 10-year capital projection will be updated to reflect the change in scheduled deliveries.
“Like all industries, we are impacted by the current supply chain issues,” said Ryan Streck, Director, Utility Service Delivery. “I appreciate the Trustee’s insightful approval to make the vehicle purchases ahead of schedule to keep utility projects and day-to-day work moving.”
An application submitted in November to the State of Iowa for the Empower Rural Iowa Broadband Grant Program Notice of Funding Availability #007 (NOFA #007) was approved to support MPW’s communications service expansion. The Utility’s application was for a total project cost of $1,039,481, with grant funding covering a maximum of 60%, or up to $623,688 of actual costs.
The grant opportunity was made possible by the federal American Rescue Plan Coronavirus State and Local Fiscal Recovery Funds. The grant targets areas of the state currently classified as unserved or underserved by the Federal Communications Commission.
In addition to the NOFA #007 funding, the Utility was awarded up to $100,086 from Muscatine County’s American Rescue Plan Act (ARPA) funds to support the project.
“We appreciate Governor Reynolds’ efforts to
support the deployment of broadband services, providing every Iowan with at least 100Mbps internet speed,” said Erika Cox, Director of Customer and Technology Experience. “The Muscatine County Supervisors share in the Governor’s vision and recognize the value high-speed internet provides to rural Muscatine families and we appreciate their contribution to make this project a reality.”
The expansion will target areas north and west of existing service areas in the Bayfield Rd. and N. Tipton Rd. area, covering nearly six square miles including 61 households, schools, and/or businesses (HSBs); an additional 52 HSBs near the expansion area are also targeted for MPW’s fiber service.
Mark Roberts, Director of Finance and Administrative Services, discussed December and 2021 annual results with the Board. MPW had a Net Loss for the month of $268K, which was $63K worse than the budgeted loss. The Water and Communications Utilities had Net Income; however, a larger loss by the Electric Utility offset those amounts. Roberts said, “2021 was a strong year for MPW, with all three utilities having positive Net Income ranging from $1.1M to $1.5M.” MPW’s annual Net Income was $3.8M, which was $8.0M better than budget. Roberts noted “one of the most significant reasons for outperforming budget was $13.8M higher wholesale electric revenues – driven primarily by 28% higher wholesale prices and 19% higher wholesale electricity sales.”
A year-end update on the Utility’s strategic plan was provided to the Trustees. Huston commented, “It’s hard to believe that we’re really just one full year into our new Strategic Plan and our team at MPW has accomplished so much. We’re seeing continued progress on major infrastructure investments throughout the community, advancements in technology and processes that are providing a better customer experience, and progress on our Powering the Future initiative, which will drastically reduce Muscatine’s carbon footprint. I am excited to be a part of this Utility during such a challenging and exciting time and I couldn’t be more proud to be a part of this team. Thank you to the Board for your continued support of our many strategic initiatives.”
Plans for the Utility’s annual Power Breakfast, scheduled for February, were shared at the meeting. The event is an opportunity for MPW’s senior leadership team to provide updates about significant projects and initiatives impacting nearly every resident, business and industry. The Power Breakfast presentation will be recorded and made available via Public Access Channel 9 in the Local On-Demand folders on MPW TV and MPW’s website.
In other Board action, the Trustees:
- Approved Contract Change Order No. 1 and final acceptance for the Unit 9 Cafeteria Roof Recover Project
- Approved Electric, Water and Communications Utilities Reimbursement Resolutions
- Approved motion to reschedule December 2022 Board Meeting to Tuesday, December 20