MUSCATINE, Iowa —Officials at Muscatine Power and Water expect environmental issues to remain at the forefront in 2013.

Brandy Olson, director of legal and regulatory services, told the Board of Water, Electric, and Communications Trustees Tuesday evening the EPA tightened its rules about particulate matter in the air, which could place Muscatine’s air quality on the cusp of attainment or non-containment.

But MP&W already has a head start on scrubbing the air clean, according to one of the utility’s assistance directors.

MPW’s electricity generating units are coal fired, which federal air-quality regulators have said emit particulate matter, tiny airborne particles that can lodge deep in people’s lungs.

In a 2012 Iowa DNR report, “Air Quality-Muscatine Iowa,” that outlined the DNR’s role in attaining federal Clean Air Act standards, the DNR identified three local sources of fine particulate matter and their estimated annual emissions output, based on 2007-08 data:

  • Grain Processing Corp. at 537.60 tons per year
  • MPW at 58.27 tons per year
  • Union Tank Car at 8.68 tons.

The report, which can be found with this story at muscatinejournal.com, said the DNR is scheduled to submit a plan to the EPA next month and implement pollution controls in August.

Mike Avesing, assistant director of power production and supply, said it’s fortunate that Electricity Generating Unit 9 was built with a scrubber that meets the requirement of removing 92 percent of sulfur dioxide from emissions, and has been improved to remove up to 99 percent.

“We actually do overcomply and have been doing so for quite awhile,” he said.

Olson and Avesing made their comments during the board’s Review of Critical Issue and Key Performance Indices for the fourth quarter of 2012.

Olson said a main focus in 2013 will concern water rules regarding the intake of water from the Mississippi River to cool equipment in the generating units — particularly the entrapment of fish — and rules regarding the effluent as the water is discharged back to the river.

Officials also expect wind power to play an increasing role in energy production. “We’ve seen some of the cheapest energy from wind production that we’ve seen in quite some time,” Tim Reed, director of utility service delivery, said earlier in the meeting. “Still not as cheap as coal production, though.”

“It (wind energy) continues to grow, and that’s competition for us,” Avesing added during his report. Avesing said Unit 9 is expected to produce energy for the wholesale market throughout the winter while Units 7 and 8 will see little if any production. He said wholesale energy prices will likely trend closely to the relatively low natural gas prices through the first quarter of 2013. Avesing said that’s good if the utility is purchasing energy but not so good if the utility is selling energy.

Utilities report

General Manager Sal LoBianco reported the electric utility’s loss of $2.36 million in 2012 was actually a $6.64 million improvement over the budget and a $6.24

million improvement over 2011. Favorable operating results increased the electric utility’s cash position to $6.9 million, he said.

LoBianco reported the water utility also outperformed the budget with a net income of $173,600, compared to the budgeted $139,000, increasing its cash position by $47,000.

But the communications utility, budgeted to finish the year with a net loss of $927,000, ended the year with a net loss of $1.17 million. Even so, the communications utility’s cash position increased $230,000, LoBianco said.

Borrowing arrangement

The board unanimously approved an arrangement allowing the water utility to borrow up to $247,000 from the electric utility. LoBianco said the electric utility, which is debt free, has secured a $10 million line of credit with local banks, and a short-term loan to the water utility will help bridge any cash needs.

“We can save some money by not opening a second line of credit (for the water utility),” he said.

Pension plan review

MP&W’s Defined Benefit Employee Pension Plan, damaged by the financial collapse of 2008, continues to recover, according to the plan’s Annual Investment Report presented by David Fee, senior investment consultant and advisory associate for Principal Financial Advisors  of Des Moines, the plan’s administrator.

After the 2008 crash, the plan would have been able to pay out only 68 percent of pension amounts. That has improved to 85 percent. The fund was at nearly $45.1 million when Fee reported last August. He said it ended 2012 with a balance of about $48.5 million and as of last Monday was at $49.8 million.

“Despite all the worries ... we are again cautiously optimistic,” said Fee.

In other business

  •  The board ratified payment of December expenditures and transactions totaling $5,068,753.
  • Erika Cox, director of employee and community relations, reported there were 17 reportable injuries among utility staff in 2012.