After a closed session at Tuesday night’s Board of Water, Electric and Communications meeting, Trustees authorized the Muscatine Power and Water (MPW) General Manager, Gage Huston, to finalize negotiations and execute a Membership Interest Purchase Agreement (MIPA) with Nokomis Bay, LLC. The agreement enables MPW to assume ownership of the Muscatine Solar 1 project (MS1) as opposed to the purchased power agreement that had been planned.
The renewable energy project is a key component of MPW’s strategy to expand renewable generation and support customer sustainability goals. Delays in the Midcontinent Independent System Operator (MISO) interconnection process and the loss of the project developer’s financing partner made it necessary to restructure ownership and operating control of the project. With MPW taking over ownership, it also intends to take advantage of the Inflation Reduction Act (IRA) direct-pay tax credits available to public power utilities, improving the project’s overall economics.
Positioning MPW as the owner and operator of MS1 gives the Utility increased control over project scheduling and costs, especially as supply-chain conditions and tax incentives have tightened under the One Big Beautiful Bill Act and recent tariff changes. Huston commented, “We are very happy to take over control of the Muscatine Solar 1 project and to reaffirm our commitment to MPW’s Choose Green Business customers, who have graciously stuck with us through the MISO delays over the past several years. We are excited and anxious to see this project come to fruition.”
The Trustees also approved a Project Summary Form (PSF) to advance preliminary development activities for Muscatine Solar 2 (MS2), the Utility’s second solar project. The facility would also be in Muscatine and interconnect to MPW’s Grandview Substation. Unlike Solar 1, MS2 is not anticipated to face MISO delays due to an option to transfer a portion of Unit 8’s interconnection capacity to MS2. While aspects of the project are still under review, the approved development activities would allow the project to take a key step forward and meet a critical tax incentive milestone.
“I appreciate the Trustees’ insight and flexibility as we advance these renewable energy projects,” Huston said. “Expanding renewable generation strengthens the reliability and sustainability of our power supply. Muscatine Solar 1 and 2 are essential to diversifying MPW’s energy portfolio and supporting the community’s long-term energy needs.”
Beginning with September 2025 bills, MPW customers have received a monthly credit from the Energy Adjustment Clause (EAC) based on energy (kWh) consumed. The EAC allows utilities to adjust electric bills to reflect net electric energy MISO margins, purchased energy costs and fuel costs, which can fluctuate throughout the year. Because of the effects of Winter Storm Fern, the market price of energy during that time, and MPW’s generating units being online supplying energy to the market, MPW’s January net revenues were higher than projected, which will result in a large EAC credit of 0.72 cents per kWh on the March bill. In total, the MPW electric customers will receive approximately $0.5 million of credits across all customer classes.
“I hope all customers in Muscatine will share in my appreciation for the commitment of the team of power plant employees who worked during very difficult conditions during Winter Storm Fern. Local generation gives us the ability to produce power when market conditions are favorable and purchase energy when prices are low,” Huston said. “That flexibility helps MPW hedge against high energy costs. Our team watches the market closely to ensure we continue delivering reliable service at the best possible value to our customers.”
MPW had strong net income in January, largely attributable to Winter Storm Fern, MISO market pricing and successful power plant operations during the cold weather late in the month. Net income was $3.1 million for the month, which was $1.8 million above budget and $2.6 million above January 2024. Mark Roberts, director of finance and administrative services, stated “without the efforts of MPW’s Generation team to run all three units, these strong results would not have occurred, and without the units operating, we would be reporting a very different picture of financial results and EAC levels.”
In other Board action, the Trustees:
• Approved payment for January 2026 expenditures and transactions for a total of $9,082,212.86.
• Approved a Project Summary Form for the Muscatine Solar 2 Project Development with a total cost of $3,141,600.
• Approved a revised Project Summary Form for Unit 9 ELG Front-End Engineering Design Project with a total cost of $1,034,400.
• Approved and adopted the Annual Electric Reliability plan and placed on file with the Iowa Utilities Commission.
Submitted by Nick Mussehl.
