Approximately 70 residents, business and community leaders participated in the latest public forum for Muscatine Power and Water (MPW) customers to learn about the Utility’s power supply strategy and transition. MPW hosted the forum Monday, March 6 to share results from their latest power supply study conducted by Leidos Engineering.
General Manager, Gage Huston, and Director of Power Production and Supply, Doug White, presented the study results including the benefits and risks associated with each of several options considered in the study. Attendees asked questions and engaged in in-depth dialogue with MPW leadership.
“The benefit of completing a power supply study is it helps establish a roadmap to best serve our customers,” explained Huston. “Although we don’t have a crystal ball, performing these studies gives us direction using market trends, data, and recommendations from industry experts to make sound decisions so we can continue to provide low-cost, reliable electricity for decades to come.”
Through their questions and reactions, maintaining a reliable and affordable electric supply was also top of mind for customers in attendance. In open dialogue, Huston and White shared that’s why MPW is taking a balanced approach to future power supply issues, focusing on affordability and reliability, in addition to sustainability, and allowing flexibility to adopt emerging technologies as they become viable alternatives.
The study evaluated 19 scenarios against potential future market conditions in terms of both cost and risk to present alternatives that best meet the reliability, affordability, flexibility and sustainability needs of MPW’s customers.
All scenarios included the Utility’s obligation to secure a minimum of 156 megawatts (MW) of capacity. As a load-serving utility in the Midcontinent Independent System Operator group (MISO), each member must own, or have under contract, enough load-serving capacity to meet its own customers’ power needs, 24 hours a day, 7 days a week. This requirement is key to keeping the bulk electric system reliable for Muscatine and all communities on the grid. Of that 156 MW of capacity, at least 90 MW needs to be local, dispatchable capacity to ensure local reliability.
“The electrical grid – an interconnected network of electricity producers for the reliable delivery of electricity to consumers – has experienced a significant increase in reliability warnings in the last year,” explained Huston. “Reliability-related warnings are likely to increase as the energy industry continues the trend toward decarbonization. Now, more than ever, it is important for the community to understand MPW’s balanced approach in our transition of electricity supply.”
This power supply study follows another conducted by Leidos in 2019 and produced several critical variations based on the current state of the bulk electric system, retirements of fossil-fuel generation, increased use of renewable resources, and the cost of fuel over time. The study found the least-cost and least-risk scenarios included keeping MPW’s Unit 9 online. Continuing to operate the coal-burning generation unit provided the lowest net cost on a per-kWh basis (affordability), while maintaining MPW’s award-winning reliability.
Other study highlights included additional opportunities to expand renewable energy sources in MPW’s power portfolio. A common thread in many of the least-cost scenarios was a minimum of 100 MW of solar – including Muscatine Solar 1, the Utility’s 24 MW solar array currently under development.
The additional solar capacity will make the Utility less dependent on carbon-intensive fossil fuels. Currently, contracted wind generation represents 6% of MPW’s native system load. The addition of 100 MW of solar would increase MPW’s renewable generation to around 28% of native system load. Construction of Muscatine Solar 1 at MPW’s Grandview Avenue Wellfield is anticipated to begin in Q4 of 2024, with an operational target of Q4 2025.
Interest in achieving a carbon-free supply is something that will continue to be evaluated but, at this time, pursuing this strategy would be the riskiest and costliest option. Due to their intermittent nature, wind and solar facilities require vast amounts of energy storage (e.g., batteries) or an additional resource (e.g., clean, hydrogen-fueled generation) to provide power at all times of day and night. These additional resources drove the costs of the 100% renewable options well above any other alternative.
The study recommended the further evaluation of a combined heat and power unit (CHP) versus a combined-cycle unit. Either of these type of units would be fueled by natural gas. The CHP unit would be best suited to restarting the sale of process steam to a local industrial customer. The Inflation Reduction Act contains provisions for CHP projects that may make its development even more economical. Federal guidance for CHP projects is currently under development. The study evaluated various options for a smaller CHP unit that could serve just a portion of MPW’s demand but would provide redundancy and resiliency to the system and continue a mutually beneficial partnership with a key customer.
Huston shared that the best path for consumers is one that maintains MPW’s award-winning reliability, assures MPW rates continue to be affordable, provides flexibility during a time the electric industry is in a rapid state of change, and furthers MPW’s sustainability initiatives that would result in lower emissions, less water usage, and other positive impacts on climate factors.
A power supply study is a detailed analysis of the electrical power supply system in a particular area or facility. Studies are typically conducted by engineers or other experts with specialized knowledge in the field of power generation and management. The goal of the study is to identify potential problems with the power supply system and recommend solutions to address those issues. A power supply study can be valuable for municipalities and other organizations that rely on a reliable and stable power supply and is an essential tool for any organization looking to ensure a reliable and efficient power supply system.
Although the study is complete, forecast and market assumptions will continue to be vetted for the Muscatine area. MPW staff expect to take a strategy recommendation to the Board of Trustees in the next several weeks.