The Ames Electric Department told the City Council on Aug. 5 that aging local generating units and the planned end of refuse-derived fuel (RDF) burning require the city to add dispatchable thermal capacity to maintain reliability and containing price volatility in regional power markets.
Staff proposed replacing Unit 7 (commissioned in 1967) and adding capacity to meet forecast growth (roughly 138 MW today projected to ~160 MW over 10+ years) with up to three large reciprocating internal-combustion engines (RICE). The utility said RICE units offer rapid start capability (minutes versus hours for older units), black-start capability for system restoration, and a way to cap extreme market-based capacity costs.
Why the city is proposing on-site RICE engines
Ames officials and the utility’s consultant presented multiple drivers: Unit 7 has exceeded typical life expectancy and will require either large reinvestments or replacement; Unit 8 (1982 vintage) is maintainable for now, but both units have been stressed by RDF burning and changing fuel economics. The electric department said pilots to retrofit or extend Unit 7 would be expensive and offer limited life extension; building modern reciprocal engines at the existing plant site would reuse gas and transmission access already in place and avoid constructing new transmission or high-pressure gas lines miles away.
Cost, timeline, and procurement
Staff presented a preliminary capital planning number of about $84 million for three engines and associated site work (this figure was identified as a conceptual estimate and subject to change). Engineering and design services were estimated at nearly $6.9 million by the engineering firm Sergent & Lundy, a consultant the utility’s selection committee ranked as best-qualified after interviews and site visits to existing installations. Council members pressed staff on the wide variance of quotes received from other firms and on the long lead times for engines, transformers and switchgear.
Council requested two parallel paths
Council directed staff to perform a targeted study of potential off-site locations beyond the existing coal yard — possible sites outside downtown that would avoid placing the new engines adjacent to Main Street — and to return to council with high-level cost estimates of moving the project offsite and the rate impacts of such a change. The council set an August 12 deadline for staff to bring back that analysis.
At the same time, council authorized staff to negotiate a contract with Sergent & Lundy for engineering services tied to the coal-yard site as the initial design path, while making clear any formal procurement for engines, transformers or construction would come back to council for award decisions. Council members said this two-track approach balances schedule risk (long equipment lead times) and the need to check whether alternative sites are financially viable.
Key operational and neighborhood concerns
Staff said locating the units at the existing coal yard reduces the need for new substations and long high-pressure gas pipeline runs, saving tens of millions of dollars compared with a remote site. Staff also emphasized the importance of sound and vibration mitigation, fire/safety design and securing black-start capability so the utility can restart its system after large outages. Several council members, residents and councilors queried the team about visual design, vibration impacts on older Main Street buildings, security and emergency risk mitigation.
Why it matters
The decision affects electric rates, local reliability (black-start capability and local capacity), land use downtown, community noise and aesthetics, and the city’s longer-term pathway to lower-carbon electricity. The project is presented as a practical step to preserve local reliability as the industry transitions and federal incentives for renewables change.
What’s next
Staff will present an off-site cost-and-rate analysis to council on Aug. 12 and will continue negotiations with Sergent & Lundy for engineering services tied to the coal-yard site so equipment procurement can proceed if council chooses that final path. Staff told council it expects to seek equipment and construction approvals in the coming months and highlighted potential long lead times for transformers and engines.