For Muscatine Power and Water (MPW), the 1970s began with a gala celebration, open house, and dedication of its Unit 8 during the first week of October 1970. The festivities masked one important aspect that would mark the 1970s for electric utility management; electricity was becoming more expensive to produce.
Four factors were at work in 1970 that would greatly affect the cost of electric power in the decade ahead. Interest rates had reached a cyclical peak by the early 1970s. Then, too, inflation was on the rise. In December 1970, general manager Jim Fuller informed the board that he had concluded negotiations with IBEW Local 240. Fuller asked the board to ratify a retroactive 8.1% wage increase for the union for the year. A third factor was the cost of fuel. Coal prices had been increasing steadily since the mid-1960s, accelerating in 1968 and 1969. Finally, environmental considerations were driving costs up. Passage of the National Environmental Policy Act of 1970 and the Water Pollution Control Act of 1972 all mandated strict new requirements for utilities and their coal-fired steam electric generating stations.
Fuel costs, interest rates, and inflation forced the board of water and light trustees to take the unprecedented step of raising electric rates in 1971. For nearly 50 years, since the city had built its first two generating units back in 1924, the cost of electric power had been declining in Muscatine. Still, even with the rate increase, MPW pointed out that the average annual kilowatt-hour (kWh) cost to a residential customer in the city was well below the national average.
On the water side, the utility used a lull in water consumption in 1970 and 1971 (caused primarily by lagging industrial sales) to beef up its water distribution system. MPW installed two new wells in its Progress Park field. Utility crews completed a 27,000-foot, 30-inch main from Progress Park into the city and also erected a new water treatment building at the Muscatine Island wellfield.
As early as 1972, utility officials met with their counterparts at the Muscatine engineering firm of Stanley Consultants to map out compliance with the growing body of environmental regulations. The plan ultimately called for the installation of an electrostatic precipitator on Unit 7, mechanical dust collectors for Units 5 and 6, and the erection of a new, 220-foot-high stack to serve the older three units still in service.
On Nov. 25, 1973, a spectacular fire gutted the utility’s general office building at Third and Sycamore. Plans were already in the works for a move to a new administrative and operations building on Cedar Street, but the fire accelerated the process. Initially built to house 70 employees, the new administration and operations center was designed to handle the utility’s expansion for a five-year period.
Another unexpected cost continued to be the sharp rise in the price of delivered coal. The utility eventually negotiated a price of $21.80 a ton for the period, some 250% higher than the cost of coal in 1970. Electric rates increased 10% in 1974 and another 7% in 1980.
Water rates, too, had to go up. The improvements made to the water system early in the 1970s were the beginning of a decade-long overhaul of the water system, including construction of a 30-inch water main from Highway 61 to the West Hill Reservoir and the pumping station, construction of a new water treatment building, and extension of a 12-inch main from Monroe Street to Weed Park Tower and on to Clay and Colorado Streets.
Even though the early 1970s had ushered in a painful period for many utilities, MPW continued to grow and prosper. it operated the largest municipal electric plant in Iowa, and both demand and energy sales had shown healthy increases in 1975. That continued growth would drive the biggest expansion in MPW’s history.
