Ames staff propose $173 million electric CIP, new quick‑start generation to protect reliability
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Summary
City staff told the Ames City Council workshop the five‑year electric CIP is about $173 million, driven largely by new generation and transmission work; staff said three quick‑start units and transmission upgrades will preserve local reliability while renewables contracts and tariffs affect timing and cost.
City staff presented a $173 million, five‑year capital improvements plan for the electric utility and told the Ames City Council workshop the largest single component is new generation and transmission work meant to preserve local reliability.
Steve Schenker handed the presentation to Don (electric presenter), who said the utility’s planning is guided by three priorities: "reliability, affordability, and sustainability." Don told council the plan includes rebuilding 69 kV lines, a 161 kV line relocation tied to Iowa DOT highway work (to be reimbursed by the DOT), and several substation and distribution projects. He said the 69 kV rebuild package is approximately $13,250,000 and represents a meaningful share of the transmission budget.
On generation, staff described plans to install three fast‑starting reciprocating internal combustion units (referred to in the presentation as "rice" units) to replace Unit 7 and provide peaking capacity. The presentation said the current fiscal‑year budget for that work is $4,000,000 and that the city expects to finance the larger project with bonds. "So the key points here, we need to have city owned generation to meet our load growth within MISO," Don said, citing reliability and an "n‑2" redundancy standard. He added that discontinuing waste‑to‑energy operations is expected to help pay for the new generation and transmission bond payments.
Staff also outlined renewable‑energy strategy and market risks. The city is pursuing an extension of its wind contract with "Nextera" that runs through 2029 and flagged that changes to federal tax incentives and new tariffs can materially alter costs; staff said a recent tariff scenario could increase the cost of the proposed rice units by about $6,000,000. Planning assumptions include a potential 1.5% annual rate increase to help offset capital costs, though staff said council will be involved in decisions on specific projects and rate impacts.
Council members questioned tradeoffs such as burying distribution lines to improve resilience after the 2020 derecho. Don said earlier estimates to bury many older neighborhood lines were large (he referenced a prior estimate of roughly $67,000,000) and warned that moving lines from backyards to front yards can damage mature trees — a factor residents prioritized in prior outreach. Staff said undergrounding remains a case‑by‑case decision, more commonly used for new development and where cost‑effectiveness and right‑of‑way permit it.
The presentation included several other electric items — coal‑yard reclamation and site preparation (budgeted at about $4,000,000), equipment and distributed control system upgrades at the plant, and distribution work coordinated with Public Works street projects. Don said the overall mix of locally generated energy will fall if the city retires waste‑to‑energy and shifts to more imported energy and contracted renewables unless additional renewable contracts are secured.
Council received the presentation and asked staff to return with specific cost, timing and rate‑impact analyses for individual projects. The council did not take a final funding vote on the electric CIP at the workshop; staff said formal approvals and bond actions will come in later meetings.
