MPW introduces new internet packages: Reviews MISO protocols

Muscatine Power and Water
Muscatine Power and Water
Muscatine Power and Water (MP&W) is a customer-driven, not-for-profit municipal utility, established by the community for the purpose of serving the community responsively, competitively, and responsibly. MP&W provides reliable electricity, high quality water, and state-of-the-art communications services, including Internet, TV, and phone services, to businesses and homes throughout the Muscatine community at rates below state and national averages with outstanding customer service. MP&W is locally controlled and operated for the benefit and betterment of the community.

Muscatine Living

MUSCATINE, Iowa– At the monthly meeting of the Board of Water, Electric, and Communications Trustees, Muscatine Power and Water (MPW) leadership shared the Utility’s active response plan in anticipation of energy-related Capacity Emergency Declarations issued by the Midcontinent Independent System Operator (MISO) this summer.

The increase in renewable, non-dispatchable energy coupled with the decommissioning of fossil fuel units in the MISO footprint has created gaps between available capacity and electricity demand. Capacity emergency declaration events are issued by MISO when there is a concern about having sufficient supply of electricity to meet demand. The frequency of declaration events has increased considerably over the last few years, which increases the risk that electricity load-serving entities, like MPW, may need to initiate load-shed protocols.

Load-shed is the process used to reduce electricity usage at times when it exceeds available supply to maintain the stability of the bulk electric system (BES) and avoid cascading outages. While load-shed events would be difficult for customers, they are intended as a last step to help avoid a widespread blackout event, which would be much more difficult from which to recover.

MPW is a member of MISO because without being able to rely on the BES, it would need greater redundancy in its local generation portfolio and would not be able to optimize its generation output by selling and buying electric energy and capacity into the MISO market. In other words, customer costs would be higher without MISO membership.

“Every utility across the country has load-shed protocols,” shared General Manager, Gage Huston. “Although load-shed is a last resort measure, MPW is obligated to comply with MISO’s directive to protect the integrity of the grid.”

Huston further stated while MPW has never experienced a load-shed event, MISO did issue a Capacity Emergency Declaration on Thursday, May 12. The event prompted staff to initiate the Utility’s maximum generation operations team to discuss first steps in the load-shed protocol if the situation continued to deteriorate. Fortunately, it did not.

“Our team has been conducting practice drills to ensure everyone knows their roles and expected duties,” shared Huston. In addition to drills, the Utility is creating customer education materials intended to instruct MPW customers on what to expect if MPW is required to load shed during a maximum generation emergency event.

Considering the forecasted increase in capacity Emergency Declarations, MPW leadership requested the Trustees to re-evaluate Plant 1’s retirement at this time.

“The importance of MPW’s Plant 1 operations for grid stability is underscored by the Capacity Auction results and the anticipated increase in Capacity Emergency Declarations,” stated Huston: “The forecasted electricity supply in MISO is potentially inadequate to meet customer demands this summer. As a utility that currently has extra reserves of installed generation capacity, retiring these units during a time of grid reliability concerns and high market prices would just increase the risk to MPW customers. Keeping this capacity available will best ensure Muscatine’s system remains reliable during these very uncertain times.”

Deferring Plant 1’s retirement will allow time to review keeping the units on as “peaking units,” which means limiting operations to times of high energy demand and grid instability.

“Utilities across the country are in a precarious position,” shared Huston. “While it’s known that renewable energy is part of the future, the intermittent nature of renewable resources is going to cause challenges in the shorter term. To maintain grid reliability and stability, dispatchable generating units such as Plant 1 are depended on to meet customer demand. The further development of transmission infrastructure and energy storage advancements will help alleviate
these concerns, but at this time, dispatchable generation must be available to keep the system reliable.”

The Board of Trustees approved a restructure of internet packages, reflecting industry best practices while optimizing the customer experience. Beginning July 1, the new service level structure will bring down the price of the Utility’s highest internet speeds while consolidating some of the lower speed tiers.

“MPW internet service rates have not increased since 2012,” said Erika Cox, director of technology and customer experience: “A lot has changed in those 10 years. Customers have more connected devices for streaming, gaming and downloading – all which gobble up bandwidth. This plan is a right-sizing of our internet tiers.”

The restructure is in alignment with a national trend among internet service providers (ISPs) to offer customers fewer but better speed options. Under the new plan, MPW will lower the monthly rates for one gigabit, 250 megabit per second (Mbps) and 100 Mbps services and add a new 500 Mbps service. On the lower speed end, a new 50 Mbps service will also be added to consolidate current 25 Mbps and 40 Mbps services. Cox noted impacted customers will receive
communications from MPW in June about service and price changes effective July 1.

Cox explained fewer customers are taking the lower speeds and more call upgrade to higher bandwidth packages when they notice buffering and slow downloads because they are maxing out their current connection. “They are trying to do more than what their internet package is designed for – it makes for a frustrating experience and it doesn’t have to be. This restructure will resolve some of that,” she noted.

At some point, even 50 Mbps will not be able to keep up with projected user device growth. State and federal authorities now consider 100 Mbps to be the new minimum standard for household broadband connectivity. “We have a plan for 100 Mbps to be our entry product, this change is considered Phase 1 of a multi-year plan,” concluded Cox.

MPW paused its electricity Energy Adjustment Clause (EAC) effective August 1, 2019. The EAC line has continued to be displayed on customers’ bills, but it has been zero since that time. With the increased volatility in energy markets, MPW will be reactivating the EAC effective July 1/ The structure will be more favorable to customers by creating thresholds within which there will be no EAC charge. Costs below the lower threshold will result in a credit to customers, while costs above the higher threshold will result in a charge to customers. Mark Roberts, director of finance and administrative services, noted “reactivation of the EAC in this revised manner is important during this time of high wholesale (MISO) electricity prices while being cognizant of ongoing cost pressures on MPW customers.”

Roberts also reviewed the April financial results for the Utility. MPW had net income for the month of $372k, which was $719k better than the loss that was budgeted for the month. The Electric, Water and Communications utilities all performed better than budget. Although the Electric Utility had a $15k loss, it was much better than the $420k loss budgeted. The Water and Communications utilities each substantially exceeded budget, with net incomes of $152k and
$234k, respectively. Roberts said, “part of the reason for good results was the timing of expenses, with some costs expected to be recognized later in the year, but in other cases we are seeing lower expenses that will continue through the year.”

MISO market prices are extraordinarily high this year driven largely by high natural gas prices, which for the month roughly averaged $6.60 per million Btu. Prices at that level are more than double prices in April 2021. Because natural gas is a fuel for many power generation units, higher fuel costs drive higher wholesale electric prices. “While MISO prices are high, MPW has managed the risks well and having owned and available generation to hedge MPW customers’
electricity needs has been extremely important,” according to Roberts.

In other business the Board:

  • Approved payment for the April 2022 expenditures and transactions.
  • Approved the revised Project Summary Form for the West Hill Sewer Separation Project Water Main Replacement – Phase 5A with a total cost of $354,900.
  • Approved the recommended Commercial II Irrigation rates effective May 1, 2023 and related Electric Rate Tables.
  • Approved the advance purchase of construction materials for NOFA #6 and NOFA #7 broadband expansion projects in the total amount of $1,027,234.

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