MPW - Powering the Future
For decades, MPW has provided reliable energy to power our community’s growth and prosperity. We are as committed today as we were nearly 100 years ago to meeting the needs and expectations of our customers.
Our record of dedicated service extends beyond providing essential services. It is also reflected in the responsible and respectful treatment of our local natural resources. As we look to our future, MPW’s promise to customers continues to be reliable, cost-effective and environmentally responsible services for the direct benefit of our community. MPW’s goals are to reduce carbon emissions associated with local electric generation by at least 25% before 2024 and 65% by 2030 through the expansion of renewable energy sources and the transition from coal to natural gas generation.
These bold targets are not the easy path. But at MPW, we strive to do what is needed for our community — no matter how difficult the task.
MPW - Solid foundation. Strong future.
- Why are you considering these changes now?
MPW recently commissioned a Power Supply Study (PSS) which was completed in 2020. Such studies help utilities plan for the future and stay in-step with industry best practices – benefiting our customers. While the study recommendations are still being vetted, the direction is clear – MPW will continue to expand its portfolio of renewables and has set aggressive targets for carbon emission reduction.
Several initiatives are currently underway to help enable our transition. A 30 MW, utility-scale solar farm is currently being investigated. We’re also evaluating the economics of a new gas-fired Combined Heat & Power (CHP) resource and will begin planning the retirement of coal-fired Units 7, 8 and 8A in 2023, and tentatively, Unit 9 by the end of the decade. This transition will allow for customer choice, by providing increased opportunities to participate in the Choose Green Muscatine program, while keeping rates as low as possible for all residents.
- Isn't renewable energy free or very low cost?
The cost of renewable energy sources has certainly come down over the past several years. It may seem that these resources are less expensive than fossil fueled resources, however, it’s extremely important to understand that the electric system must also be upgraded and modified to ensure these intermittent resources can provide the same reliability that we all have come to expect. When all of these system costs are included, it actually makes a transition to all renewable energy very expensive.
An important note - a MW of installed solar/wind is not equal to a MW of installed gas or coal generation because renewable sources are intermittent and, therefore, cannot be dispatched on demand at the request of power grid operators, according to market needs. To maintain reliability, a significant “over-build” of solar/wind installations would be necessary. At this time, the best total solution would include renewables along with dispatchable gas and/or coal generation to achieve a balance of reducing carbon emissions, while also keeping reliability high and overall costs low.
- Aren't batteries the solution to intermittent renewables?
With traditional power resources, a home or business is connected to a local distribution grid so that it can be accessed 24/7. When using a renewable energy resource, back-up and storage resources must be included with the power generation opportunity. Those resources may come from solar or wind, however the sun only shines for part of each day and only if it’s not cloudy. Wind can be very inconsistent, reducing wind generator output that may not meet high demand, or peak, needs. The storage capabilities that would be required to ensure that customers have reliable service can push the cost of a new renewable energy system beyond what the average person or community can afford. Batteries are the most common solution to renewable intermittency, and although costs have come down, it is still very expensive to store the amount that is needed to be 100% renewable. To install enough battery capacity to handle MPW’s native load for the life of the solar array (30-35 years), the cost of the battery system alone is estimated to be around $1 billion.
- What is the current percent of renewables now in MPW's portfolio?
The annual generation volume from the South Fork Wind Farm is about 5-6% (50,000 MWH/Yr.) of our total native system energy needs. This moves up and down slightly each year. In terms of the share of total energy produced by MPW resources, in 2020 SFWF produced over 8% of MPW production.
- Won't natural gas be phased out soon also, making gas-fired plants obsolete?
According to the Energy Information Administration (EIA), while US electricity generation forecasts through 2050 show renewables growing, natural gas, and even coal, will have a significant role in generation well past the forecast’s range. Natural gas and coal are dispatchable assets and are needed to balance load and intermittent renewable resources.
The EIA graph below shows that new power plants are expected to be mostly natural gas, combined cycle, and solar PV well into 2050.
- What is the expected cost to rate payers, with the changes MPW is proposing with solar and gas generation?
The lowest capital expense for MPW customers would be to continue burning coal. With our proactive interest and efforts in environmental responsibility, we’re pursuing the development of a solar farm, a Combined Heat and Power (CHP) Unit, and related transmission system upgrades.
As modeled, there’s not a significant cost difference between the Power Supply Study (PSS) recommendations and maintaining Unit 9 with anticipated future environmental compliance costs. MPW’s latest 10-year financial projection included assumed modest, annual rate adjustments of around 3%, which is great news for MPW customers considering the significant transition we are facing.
In any scenario, there will be associated costs with decommissioning and demolition of existing units but, as always, we’ll work hard to manage costs that affect consumer energy prices and rates passed on to customers.