Power plant staff reductions achieved: Strategic plan update

Muscatine Power and Water
Muscatine Power and Waterhttps://www.mpw.org
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

At Tuesday’s Board of Water, Electric, and Communications Trustee’s meeting, Muscatine Power and Water (MPW) senior leadership confirmed that with recent retirement commitments, staffing level reductions by attrition, and the extension of Plant One’s operational life as a peaking unit, previously announced layoffs at the Utility’s Power Plant will no longer be necessary, and
in fact, some positions will move forward to be filled once again.

The announcement is timely as the Midcontinent Independent System Operator (MISO) anticipated increased energy-related Capacity Emergency Declarations this summer. In May, the Trustees deferred Plant One’s retirement as a support for grid stability. General Manager Gage Huston commented, “to maintain grid reliability and stability, dispatchable generating units such as Plant One are depended upon to meet customer demand. Without appropriate staffing levels, MPW would not be able to provide the needed energy resources.”

“I would also add Muscatine owes a debt of gratitude to the men and women who have faithfully worked to keep the lights on,” Huston said. “Their institutional knowledge of our generating units, pride in maintaining these units, and their years of service cannot be overstated. I am
pleased we are able to maintain our current Power Plant workforce to continue MPW’s reputation of high reliability, which is due in large part to them.”

The Trustees approved utility senior leadership’s recommendation to authorize the General Manager to extend, via amendment, its agreement for Voice Over Internet Protocol (VoIP) with ImOn Communications, LLC of Cedar Rapids. Staff reported their satisfaction with ImOn’s reliability, customer service, and support with major initiatives such as MPW’s launch of
residential, business class and now enterprise phone services.

“ImOn committed to maintaining existing rates and offered MPW the opportunity to renew the contract with additional cost savings,” shared Huston. “Extending the agreement secures fixed costs, allowing the Utility to continue to offer phone service to customers at competitive rates.”

MPW recently launched enterprise phone service, and its main phone 563-263-2631 will be converting in August to this service. Enterprise phone service allows larger businesses to keep their existing phone numbers, have nearly unlimited phone lines, unlimited long-distance, and an up to 8-hour battery backup solution to keep MPW equipment functioning in the event of a
power failure, depending on services taken.

“We are excited to offer the enterprise phone service product. This new offering supports commerce and industry in Muscatine and illustrates MPW’s commitment to delivering services that reinforce economic development in the area,” said Huston.

MPW’s Business Class and Enterprise Phone service offers cost savings to most customers. Businesses interested in MPW’s phone service are encouraged to contact Scott Holmes, business development specialist, at 563-263-2631 for more information.

The senior leadership team also presented the 2022 second quarter Strategic Plan updates. The 2021-2024 plan serves as a guide for the Utility during ucncertain times and changing ustomer needs while ensuring sustained reliability and future growth.

The Strategic Plan focuses on Five areas:

  • Developing great employees and leaders.
  • Giving customers reasons to love MPW.
  • Investing responsibly in reliability.
  • Powering the future.
  • Growing services.

Key customer-impacting initiatives, including the Utility’s customer information system (CIS) project is well underway, with completion anticipated in December. The current customer information system has been in use for 30 years and is approaching end-of-life.

“We are excited about the features the new system will offer customers,” shared Erika Cox, director of customer and technology experience. “Via the SmartHub app, customers will be able to will be able to manage their utility and telecommunications account, pay bills, see account history, communicate with customer service staff, and get messages like outage alerts from
MPW.”

The expansion of communications services continues to make progress for the Utility’s outlying neighbors. Residents living along North Tipton Road, north of Hwy 61 to Canterbury Road, will be activated on MPW’s fiber system this fall. Construction preparatory work is being completed for the NOFA 6 area along Highway 22 East with construction planned for 2023, as well as the NOFA 7 area in the North Mulberry/Bayfield Road/North Tipton Road area, with construction planned for 2024. All three areas are one step closer to accessing reliable, high-speed fiber services.

The expansions are possible as a result of two state grants. The Empower Rural Iowa Broadband Grant Program Notice of Funding Availability #006 & #007 (NOFA #006, #007). The Utility was also awarded up to $100,000 from Muscatine County’s American Rescue Plan Act (ARPA) funds to support MPW’s initiative to bring state-of-the-art services to additional county residents.

MPW’s June financial results were strong. MPW net income for the month was $1,535k compared to a budgeted loss of $118k. The Electric Utility drove the significantly better results. The combination of high prices for the electric energy MPW sells into MISO market and consistent availability of MPW’s generation units meant excellent margins.

In addition, June was the first month MPW received much higher capacity revenues from the MISO market. Those higher capacity revenues were an outcome of the MISO capacity auction this spring that showed a shortage of capacity within MISO. While the higher capacity revenues will continue through May 2023, the ability to have high electric energy margins is contingent on high prices in a volatile energy market and the availability of MPW’s generation units. Natural gas prices dipped in June but were still
historically high. These high natural gas prices are a driver for MISO electric energy prices because a large portion of electricity within MISO is fueled by natural gas units that typically set the marginal price of electric energy.

The respective results for the Electric, Water, and Communications utilities were $1,377k of net income, $17k loss and $175k of net income respectively. The loss for the Water Utility was caused by the timing of expense recognition for maintenance projects.

In other Board action, the Trustees:

  • Approved revised budgets for the Unit 9 2022 Control Valve Overhaul Project and for the Unit 9 Turbine Intercept and Stop Valve Overhaul Project. Both projects planned to have Utility labor perform the work, however, Power Plant staffing reductions now necessitate the work be performed by outside labor at a higher overall cost.
  • Set Tuesday, August 30 at 5:28 p.m. for a public hearing to receive comments from the public on MPW’s Annual MISO Transmission Rate Update-Attachment O.

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