Ames proposes $175 million electric CIP: local thermal generation, more wind and a stake in Prairie View substation

Ames electric utility leaders on Jan. 15 told the City Council they are proposing a $175 million, five‑year capital improvement plan that focuses on new local generation to replace aging units, a major expansion of wind and solar capacity and payments to participate in a new Prairie View substation to shore up transmission deliverability.

The proposal, presented to the council during the city’s capital plan workshop by the electric utility team, lays out three main goals for the utility: reliability, affordability and sustainability. “We’re looking at an overall capital improvement plan over the next 5 years, of $175,000,000,” the presenter said, adding the utility is planning to use savings from discontinuing its waste‑to‑energy operations to help cover bond payments tied to the work.

Why it matters: the city’s Ames Plant currently supplies a large share of local capacity but staff expect to retire older units and to need 50–60 megawatts of new local thermal generation to meet capacity obligations and peak growth while keeping service reliable during outages. Councilors pressed staff about cost, timing and whether the plan would raise residential rates.

Details and direction

• New thermal generation: Staff said the plan favors multiple reciprocating internal combustion engine (RICE) generator units in the 10–20 MW range rather than a single large turbine or combined cycle plant. Those units can be fast‑started, configured in smaller increments and are easier to site locally. Staff estimated roughly $84 million would cover about 50–60 MW of this thermal capacity and said the units could be dual‑fuel capable and prepared for partial hydrogen use in the future.

• Renewables and tax credits: The draft CIP includes a substantial renewables line—about $50 million in the five‑year plan—with staff estimating that at today’s prices that budget could buy roughly 30 MW of new wind or solar, depending on eligibility for federal tax credits under the Inflation Reduction Act. “If the Inflation Reduction Act continues, that will be a huge benefit to the generation that we're looking at,” the presenter said.

• Transmission and Prairie View substation: The utility urged council participation in a joint effort with the regional transmission company (ITC) to build a Prairie View substation near the Prairie View Industrial Center. Staff said a share in that substation would provide a second major source of transmission into Ames and improve the city’s n‑minus‑2 contingency (ability to operate with two major pieces of equipment out). Staff said the first two years of transmission work in the CIP will be the most active and represent about 11% of the five‑year electric budget.

• Advanced metering and customer programs: The plan assumes a $6 million advanced metering infrastructure (AMI) rollout over multiple years and continued modest investment in public EV charging infrastructure. Staff said AMI will enable time‑of‑use rates and better demand management that can delay the need for some capacity additions.

• Cost and rates: Presenters said savings from ending the city’s waste‑to‑energy program free up transition dollars that can cover much of the bond debt service without immediate rate increases. Staff added they are modeling scenarios but currently project they could expand renewables without raising rates more than 15% over the next 10 years under the proposed approach. “We believe we can continue to grow our renewable portfolio without raising rates more than 15% over the next 10 years,” the presenter said.

Council questions and staff clarifications

Council members sought detail on how much new capacity is needed to replace the aging Unit 7 and to cover anticipated peak growth. Staff replied that the city currently has about 2 MW of spare capacity and that replacing Unit 7 requires roughly 35 MW; the new plan assumes 50–60 MW of thermal capacity to cover replacement plus growth and to provide operational flexibility.

On transmission cost sharing and ongoing regional grid upgrades, staff said many large transmission projects are financed by users and that investment often produces a return credited through Federal Energy Regulatory Commission mechanisms; that makes some transmission projects appear as operating costs rather than local capital outlays. Staff also said they have had conversations with ITC and other regional partners and that the Prairie View substation would be the relatively low‑cost option to bring an additional source of transmission into Ames compared with building a long line to a more distant city.

Reliability and cybersecurity

Council members pressed on cybersecurity and physical resilience. Staff said the electric utility maintains a closed, dedicated fiber communications network for generation and control systems and works with federal and regional reliability organizations. They said the AMI and station systems are being planned with security and redundancy in mind; the substation and line projects would also increase local redundancy in the event of storms or derecho‑style events.

Next steps

The CIP presentation was informational; councilors were not asked to take action at the workshop. Staff said the capital plan will be on the city website for public review and that formal budget and rate decisions will be considered during the regular budget wrap‑up process in February. The utility team also said it will return with more detailed cost‑benefit modeling, site‑level designs for proposed generation, and follow‑up material on transmission participation before the council makes final funding decisions.

Ending

Councilors thanked staff for the presentation and asked for additional written scenarios showing the cost and timing tradeoffs between thermal options (multiple smaller RICE units versus larger turbines), renewable procurement approaches (own vs. power purchase agreements) and the projected rate impacts for residents and businesses. Staff said they will provide those analyses during the budget process.