HomeMy WebLinkAboutA001 - Future Electric GenerationTo:Mayor & City Council
From:Donald Kom, Director of Electric Services
Date:June 17, 2025
Subject:Future Electric Generation
Item No. 1
MEMO
The City's Electric Utility is in the midst of dynamic changes. The primary fuels
used in the City's Power Plant ten years ago (coal and refuse derived fuel) are
different from those used today (natural gas and RDF), and those anticipated to
be used in 2027 (natural gas alone). Increasing demand for electric vehicles and
other devices has changed how metering infrastructure and rates are used to
manage growth in load. Extreme weather events (e.g., the 2020 derecho) and
infrastructure investments by neighboring utilities have presented the need and
opportunity for additional electric transmission capabilities. Finally, the City's
Climate Action Plan has called for significant changes in how energy is produced
to serve Ames customers' needs.
In light of these dynamics and considering the infrastructure currently in place to
meet the Utility's needs, staff presented a “first-look” of its long-range plan (copy
of the Power Point attached) to Council on December 17, 2024. This was
followed up with an aggressive 5-year Capital Improvements Plan for the Electric
Utility presented and approved by Council earlier this year. Since that time,
studies have been completed in the areas of Unit Health Assessment,
Generation Alternatives, and Generation Optimization.
In May 2024, Electric retained HDR Engineering, Inc. to review and document
the condition of major systems and equipment associated with Units 7 and 8 and
provide an overall health assessment. Separately, HDR was again hired to
perform a technical evaluation of six generation assets types and provide capital
and O&M costs, performance characteristics, and amount of CO2 per MWh.
In September 2024, BrightNight, LLC was retained to perform generation
performance/operation modeling. BrightNight utilized its energy modeling and
optimization tool to discover resource mixes that would best fit Ames. The tool
performed historical and forward-looking analyses, incorporating long-term
historical weather and market energy pricing data as well as future forecasts.
City Clerk's Office 515.239.5105 main
515.239.5142 fax
515 Clark Ave. P.O. Box 811
Ames, IA 50010
www.CityofAmes.org
2
In order to bring the City Council up to date, staff has prepared a
presentation that will be reviewed at the June 17 Council workshop. The
presentation aims to summarize the study outcomes mentioned above. Staff will
again outline the philosophies that have been employed to prepare the current
CIP for the next five years, and areas of focus farther out.
Currently, the presentation is informational only. Staff has an RFP on-the-
street to hire an engineering firm to serve as the Utility’s consultant to
design a generation plant to meet short- and long-term capacity obligations
while also considering operational costs and characteristics. This will tie
back to the concept laid out at the December 17, 2024 presentation which
considered Affordability, Reliability, and Sustainability.
ATTACHMENT(S):
Dec. 17 2024 presentation.pptx
June 17 - Presentation v2.pptx
City Clerk's Office 515.239.5105 main
515.239.5142 fax
515 Clark Ave. P.O. Box 811
Ames, IA 50010
www.CityofAmes.org
3
City of Ames
Electric Utility
Considerations for the long-term:
Affordability
Reliability
Sustainability
4
Utility History
•First started generating in 1896,
producing 0.15 mega-watts (MW)
•Currently serve 28,000 customers with
a peak demand of 138MW and
approximately 630,000 MWh annual
consumption
•Current Thermal Generation
1967- Unit 7: 33MW, Natural Gas
1972- Gas Turbine #1: 18MW, Fuel Oil
1982- Unit 8: 65MW, Natural Gas
2005- Gas Turbine #2: 29MW, Fuel Oil
•Current Green Energy Generation
2009- 36MW of Wind, Purchase Power
2029
2018- 2MW of solar, Purchase Power
2038
5
Maintain a Strong and
Robust Utility
Three Main Drivers:
Five Main Areas Affecting these three drivers:
MISO Requirements
Operating Post-Waste-to-Energy
Climate Action Plan/Environmental Regulations
Load Growth
Asset Health/Life
6
Midcontinent Independent System
Operator
• Independent, not-for-profit,
member-based organization that
manages the flow of high-
voltage electricity across its
region.
• Called an Independent System
Operator (ISO) because it has
independent authority, overseen
by the Federal Energy Regulatory
Commission (FERC), to operate
the transmission lines owned by
the utilities. Designated by FERC
as the “regional transmission
organization (RTO) for its territory.
7
Midcontinent Independent System
Operator
• Provides rules so the
wholesale electricity
transmission system
operates reliably and safely.
• Provides electricity markets
in which buyers and sellers
bid to purchase or offer to
sell wholesale electricity.
8
MISO Capacity
•Generation Capacity - The amount of electricity a generator can produce when
it's running at full output
•Demand Capacity – The amount of electricity the City Electric system has demanded
during peak hours, averaged over the last 5 years. Determined for each season of the year
•MISO requirement:
Generation
Capacity
Demand
Capacity109%
•Obtaining Generation Capacity:
1.Own generation capable of producing the required amount of energy
2.Purchase capacity from other utilities who have excess
•Capacity is sold in units of Megawatt-day
•Until recently, prices were around $10-$15 / MW-d
•2022 capacity prices were around $200/MW-d for summer season. Prices dropped back to $30 for our region but are
predicted to be around $150 this next year as more utilities retire generation
150MW @ $15 = $202,500/season 150MW @ $150 = $2,025,000/season
•Ownership of reliable generation is proving very valuable
9
MISO
Requirements for a generator to receive Capacity
credit
•City of Ames Current Capacity: .
•Unit 7- 39MWx86% =33MW, starts in 6 hrs
•Unit 8- 65MWx73% =50MW, starts in 10 hrs
•GT1- 16MWx90% =14MW, less than 2hr start
•GT2- 25MWx96% =24MW, less than 2hr start
•A Generation Unit must meet many requirements depending on how it is
characterized by MISO. Generally speaking:
•Fast start. The quicker it can be turned on and off, the better.
•Within 30 minutes is ideal
•Less than 2 hours is desired
•Firm fuel source. Unit can produce at anytime for as long as needed.
•Demonstrated output. Unit has demonstrated ability for 1 to 4 hours (depending on generation type)
•Reliable Service. Historical performance for the last 3 years is monitored.
•Anytime a generator trips offline or fails to start, the capacity credit drops.
•The amount of time a generator is out of service due to an unplanned outage, the capacity credit drops.
•Wind PPA – 30MW x 16.5% = 5MW
•Solar PPA – 2MW x 50% = 1MW
10
Transmission
Transmission Connecting Ames Electric System
to Grid
•Future substation and additional lines
being installed by ITC in 2025. Ames
Electric can/should own a portion of the
substation
• If both Boone and Ankeny
lines go down, we have
generation on to cover.
• When generation is not
always on, we need a third
large transmission line
11
Transmission
•Desire to always have what is called N-2
contingency
•N= options to serve entire city load
•Boone Junction 161 kV line
•Ankeny 161kV line
•Internal Generation (when on)
•Future 161kV line
•Note – 69 kV line limited to 70
MVA
•If both Boone and Ankeny lines go
down, we have generation on to
cover.
•When generation is not always on,
we need a third large transmission
line
12
Environmental Regulations
•Electric Generating Greenhouse Gas Rule
•Published May 9, 2024
•Aimed to largely decrease greenhouse gases from existing coal-fired plants
•Ensure new combustion turbines are built to obtain GHG emission reductions on par
with those obtained through carbon capture and sequestration
•There is currently litigation challenging several items in the rule
City of Ames Thermal Generation Amounts
•Unit 7 = 1,350 lb CO2/MWh
•Unit 8 =1,300 lb CO2/MWh
•GT-1 = 2700 lb CO2/MWh
•GT-2 = 1790 lb CO2/MWh
Gas-Fired Steam Units Presumptive Limits
•Base Load (CF>45%): 1400 lb CO2/MWh-gross
•Intermediate Load (CF 8-44%): 1,600 ‘’
•Low Load (CF<8%): 130 lb CO2/MMBtu
Gas-Fired Combustion Turbine Presumptive Limits
•Base Load (CF>40%): XXXXX lb CO2/MWh-gross
•Intermediate Load (CF 20-40%): XXXXXX ‘’
•Low Load (CF<20%): XXXXX lb CO2/MMBtu
*Capacity Factor (CF)- Ratio of energy produced for a period of time vs what could have
been produced at continuous full power during that same period
13
Green
• $50 Million
• % green
• 1.5% rate increase per year
14
Load Growth
•Electric Vehicles
•Electrification of Homes & Businesses
(Existing and New)
•Weather changes
•New Customers
Utility current forecast:
Peak Demand = 138MW (Aug of
2023)
Annual Usage = 629,000MWh
(2023)
By 2035: Peak Demand =160MW
Annual Usage = 700,000MWh
15
AMES Net System Energy – 12 month rolling
530
540
550
560
570
580
590
600
610
620
630
640
GWh per Year
Net System Energy Projection Net System Energy Historical
16
Asset Health
Generation
•Steam Units U7 & U8
•Overall age – design life is 30yrs
•Life assessment – Dec 2024
•RDF as been particularly hard on boilers
•Combustion Turbines
•GT-1
•Generator and expander are original
•Engine being replaced
•Controls being replaced
•GT-2
•Controls being replaced
•Approaching 20 yrs old
Transmission
•161 kV lines
•Boone line needing face lift within the next 5yrs
•NE Ankeny line in good repair
•69 kV system
•System is 30 yrs old and needs to be largely
replaced
17
Asset Health
Generation
•Steam Units U7 & U8
•Overall age – design life is 30yrs
•Life assessment – Dec 2024
•RDF as been particularly hard on boilers
•Combustion Turbines
•GT-1
•Generator and expander are original
•Engine being replaced
•Controls being replaced
•GT-2
•Controls being replaced
•Approaching 20 yrs old
Transmission
•161 kV lines
•Boone line needing face lift within the next 5yrs
•NE Ankeny line in good repair
•69 kV system
•System is 30 yrs old and needs to be largely
replaced
18
Asset Health
Generation
•Steam Units U7 & U8
•Overall age – design life is 30yrs
•Life assessment – Dec 2024
•RDF as been particularly hard on boilers
•Combustion Turbines
•GT-1
•Generator and expander are original
•Engine being replaced
•Controls being replaced
•GT-2
•Controls being replaced
•Approaching 20 yrs old
Transmission
•161 kV lines
•Boone line needing face lift within the next 5yrs
•NE Ankeny line in good repair
•69 kV system
•System is 30 yrs old and needs to be largely
replaced
19
1)Maintain ability to serve City's peak load amount with generating units that can be turned on
at anytime
•Creates ceiling for energy pricing. Protects utility from volatility in market
•Provides Opportunity to sell energy to Market when grid demands it
•Creates ceiling for capacity pricing.
2)Under normal conditions, have N-2 redundancy to serve the City's electric load without local
generation, even if any two of the transmission lines capable of feeding the City are lost
•Reduces risk of large-scale outage due to transmission limitations
3)Keep customer costs competitive with surrounding Electric Utility companies
• Do not raise rates more than 15% cumulatively over the next 10 years
4)Limit overproducing (selling) when generating only from green sources
• Can not rely on overproducing to meet City’s green goals. Market price conditions when are often negative when the wind speed is
high
5)Serve as much of the City's electric load with green energy without compromising other guidelines
Utility Plan Development Guidelines
Current: Peak Demand = 138MW Annual Usage = 629,000MWh
Assumptions
by 2035: Peak Demand = 160MW Annual Usage = 700,000MWh
20
Chart shows the entire
cost of electricity,
including the energy
costs, monthly service
costs, and all
additional costs like the
Energy Adjustment
Charge for the four
electric utilities serving
Ames. The cost per
kWh figure is
calculated by the entire
consumer payments,
divided by the total
amount of energy
(kWh) sold. This data is
filed once per year with
the Iowa Utilities
Commission.
Note - these figures do
not reflect the impact of
recent rate increases
by Alliant Energy or
Midland Power.
21
Chart shows the entire
cost of electricity,
including the energy
costs, monthly service
costs, and all
additional costs like the
Energy Adjustment
Charge for the four
electric utilities serving
Ames. The cost per
kWh figure is
calculated by the entire
consumer payments,
divided by the total
amount of energy
(kWh) sold. This data is
filed once per year with
the Iowa Utilities
Commission.
Note - these figures do
not reflect the impact of
recent rate increases
by Alliant Energy or
Midland Power.
22
Chart shows the entire
cost of electricity,
including the energy
costs, monthly service
costs, and all
additional costs like the
Energy Adjustment
Charge for the four
electric utilities serving
Ames. The cost per
kWh figure is
calculated by the entire
consumer payments,
divided by the total
amount of energy
(kWh) sold. This data is
filed once per year with
the Iowa Utilities
Commission.
Note - these figures do
not reflect the impact of
recent rate increases
by Alliant Energy or
Midland Power.
23
Here’s what you’re going to see in
the Electric CIP
• Need to Replace Older generation, load
growth
• New Projects in CIP
– New Thermal (from savings to drop RDF)
– New Green Energy (from 1.5%/yearly
increase, can be increased/decreased as
Council directs have examples)
• How to paying for?
24
City of
Ames
Electric
Considerations for new Electric Generation
1
25
What We’re Going to
Cover
- Utility Priorities and Guidelines
- Current Utility status and the projected needs over
the next 10 years- Health Assessment of current generation
- New Generation Technology assessment
- How new generation technology fits City of
Ames- Utility plans for next 10 years
2
26
Utility
Priorities
Reliability:
-Transmission –Electric lines connecting Ames to the
outside electric grid.
- Ability to remove different transmission lines and
still serve all Ames load without local generation
-Capacity –Ability to generate enough energy to meet
customer’s peak load
- The System Operator (MISO) requires Utilities to have
capability of covering 110% of peak load
Affordability:
-Rates – Avoid large increases, compare to surrounding
Utilities
Sustainability:
-Green Resources – Intermittent Resources such as Wind and
Solar generation.
-Heavily Dependent on Mother Nature
3
27
1)Maintain ability to serve City's peak load amount with generating units
that can be turned on at anytime (Thermal Generation)
•Creates ceiling for energy pricing protecting utility from volatility in market
•Provides Opportunity to sell energy to Market
•Creates ceiling for capacity pricing.
2)Under normal conditions, have three transmission options to serve the
City's electric peak load without local generation on
•Reduces risk of large-scale outage due to transmission limitations
3)Keep customer costs competitive with surrounding Electric Utility companies
4)Limit overproducing (selling) when generating only from green sources
•Market price conditions are often negative when the wind speed is high
5)Serve as much of the City's electric load with green energy without
compromising other guidelines
Utility Plan Development
Guidelines
4
28
Current
•28,000 customers
•Peak demand of 138MW
•630,000 MWh annual
consumption
•Thermal Generation
1967- Unit 7: 33MW, Natural
Gas
1972- Gas Turbine #1: 18MW,
Fuel Oil
1982- Unit 8: 65MW, Natural
Gas
2005- Gas Turbine #2: 29MW,
Fuel Oil
•Green Energy Generation
36MW of Wind-PPA ends in 2029
Utility
Status Projected By 2035
•30,000 customers
•Peak demand of 160MW
•700,000 MWh annual
consumption
•No longer burning RDF
(2027)
5
29
Unit 7 and Unit 8
Health Assessment
•Retained HDR, Inc to review and document the condition of major
systems and equipment associated with Units 7 and 8 and provide
an overall health assessment
•HDR provided a thorough 48-page report that is summarized in
three categories:
LEAST Concern– The equipment can reasonably be expected to continue operation
through the future and beyond (5-10+ years) after RDF is no longer combusted given that
appropriate maintenance and inspections continue.
MODERATE Concern – The equipment can reasonably be expected to continue operation
after RDF is no longer combusted (10 years or less) given that appropriate maintenance
and inspections continue.
CRITICAL Concern – The expected operational life of the equipment cannot be predicted
and has elevated risk of failure.6
30
Unit 7 Health Assessment
Unit 7
Equipment Concern Concern Concern
Boiler and Steam Drums X
Main Steam Piping X
Induced Draft Fan X
Forced Draft Fan X
Air Preheater X
Stack X
Steam Turbine, Generator and
Exciter
X
Boiler Feedwater Pumps and
Piping
X
Low Pressure Feedwater
Heaters
X
Deaerator and Storage Tank X
High Pressure Feedwater
Heaters
X
Condensate Pumps X
Condensate Storage Tank X
Condenser X
Steam Jet Air Ejector X
Cooling Tower X
Circulating Water Pumps X
Circulating Water Piping X
Electrostatic Precipitators X
GSU Transformer X
Turbine Controls X
Excitation Controls X
7
•Unit 7 built in 1967 = 58
yrs old
•Left column are specific
systems
•X’s not highlighted are
indicating systems that
are only in their
respective category
because of age
•Critical concern:
•Boiler tubes
•Turbine/Generator and
Exciter
•Condenser
•Circulating water
31
Unit 7 and Unit 8 Health
AssessmentUnit 7
Equipment Concern Concern Concern
Boiler and Steam Drums X
Main Steam Piping X
Induced Draft Fan X
Forced Draft Fan X
Air Preheater X
Stack X
Steam Turbine, Generator and
Exciter
X
Boiler Feedwater Pumps and
Piping
X
Low Pressure Feedwater
Heaters
X
Deaerator and Storage Tank X
High Pressure Feedwater
Heaters
X
Condensate Pumps X
Condensate Storage Tank X
Condenser X
Steam Jet Air Ejector X
Cooling Tower X
Circulating Water Pumps X
Circulating Water Piping X
Electrostatic Precipitators X
GSU Transformer X
Turbine Controls X
Excitation Controls X
Unit 8
Equipment
Concern Concern Concern
Boiler and Steam Drums X
Main Steam Piping X
Induced Draft Fan X
Forced Draft Fan X
Air Preheater X
Stack X
Steam Turbine, Generator and
Exciter
X
Boiler Feedwater Pumps and
Piping
X
Low Pressure Feedwater Heaters X
Deaerator and Storage Tank X
High Pressure Feedwater Heaters X
Condensate Pumps X
Condensate Storage Tank X
Condenser X
Steam Jet Air Ejector X
Cooling Tower X
Circulating Water Pumps X
Circulating Water Piping X
Electrostatic Precipitators X
GSU Transformer X
Turbine Controls X
Excitation Controls X
DCS X
8
32
Unit 7 and Unit 8 Health
AssessmentUnit 7 Summary:
1. Unit 7 will be 60 years old in 2027
2. Repairing/replacing the equipment labeled in CRITICAL Concern would be 2/3rds
the cost to entirely replace Unit 7 with a new unit.
3. After completing RDF program in 2027, the boiler will need significant repair
to continue operation
Unit 8 Summary:
1. Unit 8 is old (43 yrs) but most of the equipment is in good repair
2. Need to continue maintenance plans to extend life another 10+ years
3. The less RDF burned in the boiler, the longer the tubes can continue as is
4. The smaller number of hours operated, the longer the unit can be preserved for
capacity
Future Planning:
1. Burn RDF in Unit 7 as much as possible to preserve Unit 8
2. Retire Unit 7 sometime after the completion of RDF program
3. Build new thermal generation to replace Unit 7
4. Operate Unit 8 less often to preserve for capacity
5. Include Unit 8 retirement some time after 10 years
9
33
•May 2024, Retained HDR Engineering, Inc to perform a Technology
Assessment
•Results would provide Capital and O&M costs, performance
characteristics, and amount of CO2 per MWh
•A Class 5 estimate was used to obtain a rough order of
magnitude (-50% to +100%)
•Assessment included three different types of green
resources:
•Solar
•Wind
•Battery
•Three different types of Thermal generation:
•Reciprocating Internal Combustion Engine (RICE)
•Simple Cycle Combustion Turbine (CT)
•Combined Cycle (CC)
•Size of Thermal generation considered:
•Unit 7 = 33MW, Growth = 20MW, Unit 8 = 65MW → 120MW
Generation Technology
Study
34
Battery
Storage
Wind
Solar
Generation Technology-
Green Resources
11
35
Combined
Cycle (CC)
Simple Cycle
Combustion Turbine
(CT)Reciprocating
Engines (RICE)
Generation Technology-
Thermal Generation
12
36
RICE
Thermal Generation Options
CT
13
CC
Why These Thermal Generation Options?
•Ability to cycle (turn on and off) multiple times per day
•Provide Heat Rates (ratio of fuel to power) that are
competitive in market
•Relatively lower cost to install
•Proven technology available today
•Can operate in Midwest environment
•Relatively clean for the environment
37
RICE
Thermal Generation Study
Results
CT
•2 min to full load
•Start/Stops -
Unlimited
•Heat Rate* - 7,500
Btu/kWh
•Efficiency - 49%
•Constant capacity all
year
•Cost/kW - Medium
•10 min to full load
•Start/Stops - Limited
•Heat Rate – 8,500
Btu/kWh
•Efficiency - 41%
•Capacity affected
seasonally
•Cost/kW - Medium
•3 hours to full load
•Start/Stops - Limited
•Heat Rate - 7,000
Btu/kWh
•Efficiency - 57%
•Capacity affected
seasonally
•Cost/kW - Low
14
CC
38
Moving to Modeling
•Modeling was then needed to determine how each technology would
fit City of Ames
•September 2024 - BrightNight, LLC was retained to perform
modeling.
•BrightNight utilized its energy modeling and optimization
tool to discover resource mixes that would best fit Ames.
•The tool performs historical and forward-looking analyses,
incorporating long-term historical weather and market data
as well as future forecasts.
•Modeled over 800 scenarios, reduced to the 10 least cost options
for each technology 15
39
Modeling
Average Load data for 2022
•Average day for each month
•Average load per hour
16
What City of Ames
experiences:
•Customers higher demands:
•Summer midday
•Customers lower demands:
•Spring & Fall
throughout the
evenings
40
Modeling – Solar and Wind
Energy
17
City Average Load City Wind Farm City Solar Farm
•Wind Resource provides more energy annually but not when it is needed
•Solar Resource provides energy when needed but much less energy on annual basis
41
Modeling – Solar and Wind
Energy
18
Average City of Ames Load Profile
Average Performance of 63MW Wind
Resource
Average Performance of 26MW Solar
Resource•63MW of Wind and 26MW of Solar accomplishes 50% of power provided
by green resources
•There is still a large need for more generation
•The “Average” graph does not show the whole story
•Need to look at actual performance to determine the best
generation to fill in the other 50% plus meet the Utility
42
Modeling – Solar and Wind
Energy
19
City of Ames Load Profile
63MW of Wind and 26MW of Solar Performance
•Looking at actual performance, one can see adding more wind and
solar will cause over production in some months and in other months
there will still be a large need for more generation
•Adding batteries – Customer costs go very high
•63MW of Wind and 26MW of Solar show to be the best fit for
achieving 50% green
43
Modeling – Thermal
Generation
Considerations and Assumptions:
•150MW plant was modeled for each Thermal Generation option (determined by
minimum CC size)
•Combined Cycle (CC) – 1 unit
•Reciprocating Internal Combustion Engine (RICE) – 8 units
•Simple Cycle Combustion Turbine (CT) – 3 Units
•Assumed 20-year life – Each will have capability of operating longer but
20 yrs was used to line up with debt service
•Each scenario uses what is called the Levelized Cost of Energy (LCOE)
•This is the average cost per MWh over the lifetime of the asset
•All costs (Operating and Maintenance, Debt service, Fuel, etc)
•The City’s combined dispatchable generation last year averaged a LCOE
of $90/MWh
•Value of Capacity is not reflected in this number – LCOE assumes all
value is in energy produced
•Each scenario also shows expected amount of operating per year, called
Capacity Factor
•Capacity Factor (CF) = total unit capability x 8760hrs (1 year) /
projected production
20
44
Modeling – Thermal
GenerationThermal Type LCOE Yr 1
[$/MWh]
Thermal CF
Yr 1 [%]
CAPEX
[$ 10^6]
CC 61.8 49%205
CC >50% Green Wind 70.6 49%356
CC >50% Green Wind&Solar 71.4 46%358
CC >100% Green 77.2 49%470
RICE 70.7 22%200
RICE >50% Green Wind 79.5 22%352
RICE >50% Green Wind&Solar 80.2 21%354
CT 73.8 11%207
CT >50% Green Wind 82.6 11%359
CT >50% Green Wind&Solar 83.1 11%361
21
•The Options with green resources include IRA funding. Removing IRA
funding increases the $/MWh up roughly $15
•The scenario with the lowest LCOE is Combined Cycle.
•Modeling scope included using similar dispatching criteria for
each technology, only responding to Day Ahead pricing.
45
Modeling – Thermal
GenerationThermal Type LCOE Yr 1
[$/MWh]
Thermal CF
Yr 1 [%]
CAPEX
[$ 10^6]
CC 61.8 49%205
CC >50% Green Wind 70.6 49%356
CC >50% Green Wind&Solar 71.4 46%358
CC >100% Green 77.2 49%470
RICE 70.7 22%200
RICE >50% Green Wind 79.5 22%352
RICE >50% Green Wind&Solar 80.2 21%354
CT 73.8 11%207
CT >50% Green Wind 82.6 11%359
CT >50% Green Wind&Solar 83.1 11%361
22
•The capital amounts are very high
•Modeled each plant at 150MW - Only need 120MW
•RICE and CT can be built to 120MW, reducing CAPEX by $40 million
for each of these options
•RICE and CT can be built in stages, allowing the use of current assets
for longer
•RICE and CT can respond to Real Time market, working well with green
resources
46
1. Maintain ability to serve City's peak load amount with generating units that can
be turned on at anytime
2. Under normal conditions, have N-2 redundancy to serve the City's electric load
without local generation, even if any two of the transmission lines capable of
feeding the City are lost
3. Keep customer costs competitive with surrounding Electric Utility companies
4. Limit overproducing (selling) when generating only from green sources
5. Serve as much of the City's electric load with green energy without compromising
other guidelines
Options that Meet Utility
Guidelines
Guidelines Thermal Type LCOE Yr 1
[$/MWh]
Thermal CF
Yr 1 [%]
CAPEX
[$ 10^6]
1 2 3 4 5
x x x CC 61.8 49%205
x x x x CC >50% Green Wind 70.6 49%356
x x x x CC >50% Green Wind&Solar 71.4 46%358
x x CC >100% Green 77.2 49%470
x x x x RICE 70.7 22%200
x x x x x RICE >50% Green Wind 79.5 22%352
x x x x x RICE >50% Green Wind&Solar 80.2 21%354
x x x x CT 73.8 11%207
x x x x x CT >50% Green Wind 82.6 11%359
x x x x x CT >50% Green Wind&Solar 83.1 11%361 23
47
Potential Site
Existing Coal Yard
•Land Area
•Located close to existing Unit 7 and Unit 8
•8 acres at current site
•Additional 2 acres if able to use RRP current site
•Substation Access
•Ames Plant Substation located just to the Northeast
•Open connection to Ames Plant sub once RDF program
ends
•Large Gas line on North side of property
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48
Conclusion
•Existing Steam Units:
•Unit 7 = Will need major maintenance after RDF program ends.
Retire in less than 10 years
•Unit 8 = Aging and needs to be considered for retirement in less
than 15 years•Thermal Generation Options:
•Combined Cycle = Lead times 5+ yrs, Large dollar investment, Less
flexible, Needs to run
•Combustion Turbine = Lead times 5+ yrs, Staged buildout, Less
flexible, Poor heat rate
•Reciprocating Engines = Short lead times, Staged Buildout, Very
Flexible, good heat rate •Utility Plan Going Forward
•RICE is the best fit for City of Ames Electric
•First build 60 MW (3 units) to replace Unit 7 capacity and 20MW
for anticipated load growth. Located at the old coal yard site
•Build additional 60MW (3 units) to replace Unit 8 within next 15
years – can review plan at that time
•Build or contract 63MW of Wind and 26MW of Solar to gain > 50%
Renewable Energy
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49
Cost/Rate Impacts
•Current Electric CIP, passed by Council March 2025
includes:
•Funding for 3 RICE engines
•Replaces Unit #7 by 2030
•Meets expected load growth
•Has fast response time to meet energy market
fluctuations, black start
•Funding for substation ownership and new Transmission
Source
•Improves reliability
•Up to $50M investment in Renewable Generation
•Funding
•Savings from discontinuation of Waste-to-Energy
•Anticipated 1.5% rate increases over the next 5 year
(Cost of Service Study)
•Current Wind contract replaced in 2029, gaining double
energy for same price
•Long-term Unit #7 CIP projects eliminated; O & M reduced
26
50
27
Energy Mix
Today vs. End of 10yr plan
51
Jul 2025
-Procure
Engineerin
g Services
-Start
Permitting
Process
Timelin
e
2035+
-Install
60MW of New
Generation
-Retire Unit
8
Feb 2026
-Order 3
Engines
-Order
Transformer
s
&
Switchgear
Nov 2026
-Issue
Contracts
for
Constructi
on
Aug 2027
-Start
Constructi
on
Apr 2029
-
Commercia
l
Operation
of new
generatio
n
2030+
-Retire
Unit 7
28
52
Question
s
29
53