The following is a transcript of the July 22, 2024, episode of Public Power Now. Learn more about subscribing to Public Power Now at Publicpower.org/Podcasts. Some quotes may have been edited for clarity.
Paul Ciampoli
Welcome to the latest episode of Public Power Now. I'm Paul Ciampoli, APPA's news director.
Our guest in this episode is Troy Adams, general manager for Wisconsin Public Power utility Manitowoc Public Utilities. He has served in that position since June 2020. Prior to his current role, Troy served as general manager for Minnesota public power utility Elk River Municipal Utilities.
Troy, thanks for joining us.
Troy, to get our conversation started, I wanted to give you an opportunity to talk about your role and responsibilities as general manager and also provide an overview of the utility.
Troy Adams
Our community, Manitowoc, is located on the shores of Lake Michigan. We’re maybe 30-40 minutes South of Green Bay...and a little more than an hour north of Milwaukee. Our town is kind of situated just far enough away from the bigger cities that we have...population is about 35,000. The utility serves electric and water. We just took on wastewater from the city.
We have a steam utility. We also have dark fiber that we serve in the community.
From the electric side, we're about 18,000 meters. Pretty good industrial customer load -- our overall peak is about 110 megawatts.
As we'll talk about a little bit later, we have generation. We've got two coal power plants that are still in operation and we have a CT turbine and we've got a solar garden and then we have contracts with others for some supplemental power.
Paul Ciampoli
And could you provide a little more detail in terms of your role and responsibilities?
Troy Adams
I am the general manager, so I oversee all aspects of the utility. We've got about 110 employees.
I report to an independent commission from the city -- it's seven members. Two are representatives from the City Council -- one is the mayor and one is a member of their Finance Committee, and then the others are appointed at large from the community appointed by the City Council.
Paul Ciampoli
As you know, Manitowoc Public Utilities is pursuing a power plant boiler refueling project. I wanted to give you an opportunity to tell our listeners more about that project.
Troy Adams
I joined Manitowoc in 2020. In addition to just things being different during the pandemic, there was a lot of pressure for utilities to be evaluating their portfolio, power plants...we're part of MISO for our power grid and there was definitely a lot of pressure financially to consider shutting down power plants because the cost of operating a coal power plant anyway...power plants weren't being economically dispatched on that fuel source.
So one of the first things we were looking at is are we going to shut down our power plants or are we going to try and do something to get them in the money or position them for longer success? Our Commission has been really adamant about the community has paid for these power plants, they're paid for.
One was one of the two boilers that we have was built in the mid 90s, the other one in the mid 2000s. In the world of power plants, these are new.
We have no debt. And the Commission felt very strongly that we need to take a hard look at how can we extend the life of these power plants and not have stranded investment.
Of those two power plants, one of the fuel sources we've been using, we had been blending coal. We had been blending pet coke and we'd also been blending a small amount of a renewable fuel source, a renewable biomass since the 90s. So we had some experience with this, this alternative fuel from a local source.
Just to kind of give some context...Wisconsin is a paper industry state. Lots of lumber. Lots of paper products come out of the valley and there's a significant amount of waste with that, so this waste product ends up in the landfill.
Some of this waste product had been diverted to two of our partner companies that would take that and press this waste product -- clean industrial waste so it's not post consumer. It's clean industrial waste. Press it into a pellet. Similar to like a wood stove pellet. The partners had worked with the EPA and the DNR to go through the process to get this certified. The pellets are recognized as a renewable fuel in the state of Wisconsin.
So when we were burning those, we were actually getting renewable fuel credits for the volume that we were burning. So we've been blending that in since the 90s, at a very small rate, and so when we were trying to decide what we were going to do with these power plants, that was actually the cheapest fuel that we had. Especially when things happened in Europe with the war in Ukraine. We saw coal and PetCo prices skyrocket. Because solid fuel was being shipped over to Europe -- shipped elsewhere. And supply and demand created an artificial market.... upward pressure on fuel pricing.
At the same time, there [were] a lot of challenges with transportation. We couldn't get a train. We were struggling with transportation costs with trucking, so this engineered pellet that was locally sourced ended up being significantly less cost than all of these other fuels.
So we started looking at what would it take to run at 100% on this fuel? And it behaves differently in the boiler. It was engineered to be similar BTUs to that of coal. But it's a lighter fuel. It's intensified because it's pelletized, but it's definitely lighter than coal that would go into our boilers and they're both CFB style boilers. So we can just kind of dump in whatever fuel we want. But the fireball ends up sitting higher in the boiler. Air flows needed to be different, so we spent probably about a year working with the OEM for the smaller of our two boilers. It's a 23 MW CFB.
We ended up working with the OEM to go through what I'd call tuning and kind of optimize airflow and feed rate and everything with that boiler.
And we ended up getting 6% increase in output, which was pretty exciting to realize that maybe out of desperation, maybe out of opportunity, we were going to switch to this fuel and try and run at 100% on this renewable fuel that's locally sourced and would otherwise go to a landfill.
We were able to switch to that run at 100% and actually run more efficiently. So with that, that was kind of maxed output from our partners, the pelletizing companies we've been working with – we were taking all they could give us. So that began the next phase of our project where we are looking to expand and increase volume of pellets locally...we've worked with those partners to increase output at their existing facilities.
And now we're currently working at looking at a way to add existing production of pellets locally, just to have some diversity and location of pellet production, but add another facility locally that would get us to the point where we could run both of our boilers at maximum output, so the volume that we're setting as a target is about 18,000 tons a month.
And to put that in perspective, we just built a covered storage facility -- ii actually looks like an aircraft hangar -- that stores about a month, month and a half of fuel because it actually performs better if it's dry, so we've built this hangar. A one-month supply of fuel is about the equivalent of an NFL football field stacked with pellets 30 feet high, so this is fuel that we're taking, it’s locally sourced, right, but the alternative path for this is it would have gone into a landfill. The goal is to be diverting 18,000 tons of this waste product from the landfill and make energy out of it versus having it turn into methane in a landfill, so it ends up being a pretty significant swing from an environmental perspective.
And not that that wasn't a consideration when we started looking at this, we were just looking at number one, the economics and how can we preserve the asset. And then we start researching it a little bit more and discover that this is positioning us really, really well from an environmental goal standpoint.
So we've been working with the state with that and this project -- because it really crosses the aisle politically -- have had great support helping us move this project forward because it's a little bit outside of the box and everyone else is talking about shutting down power plants. And here we're talking about extending the life of a power plant. But because we're taking care of another issue in our state, we've gotten all the support, so it's pretty exciting times right now at the utility.
Most utilities – there isn’t really a lot of change, or change has been slow for decades and all of a sudden everyone is now experiencing all this change from external forces, internal forces, all at one time right now, at a rate faster than ever before. And here we've got this project, this solution to handle the change that...was there just waiting for us to take advantage of it, so we're really excited about the project.
Paul Ciampoli
Yeah, it's very interesting and actually this is the first time I've heard of such a such a project, so one question that comes to mind -- it seems like one of the benefits you have in terms of pursuing this project is literally, physical access, close physical access to these pellets.
So if you're a utility in another state that would be interested in pursuing a similar project, what kind of hurdles would they face potentially in terms of maybe not having the unique situation that you guys have?
Troy Adams
I would think that there's still going to be some level of availability of this type of material. We just happen to have lots of paper production facilities within a 200-mile radius. There's just a lot of raw material supply and one of the other things that we're working on accessing from a raw material standpoint -- think about all the Amazon boxes, all the shipping that is being recycled now. There's a significant amount of that material that can be recycled. But there's a lot that can't be, so they break down those boxes and there's all these short fibers that ends up becoming sludge. And all the string and tape and labels and all that stuff ends up just being pulper reject is what they call it, and that all goes in the landfill. We have been doing test runs.
We're an agriculture state too. There are a lot of companies that do drying for corn and other things. We've been working with local consulting firms to use some of that technology in a different way and dry waste material that can't be used for recycling and that also would be going to the landfill. So I think that opportunity exists everywhere, just with all that material that can't be recycled. So we're taking that -- we have successfully pelletized that and run that through.
Now we just need to be able to do commercial level output out of some of those drying facilities to see if we can get the throughput we need to actually make that work. And then one step beyond that, we have been working on doing torrefaction pyrolysis. Where you take that material or any of this material, this biomass, and you heat it up to break down the material in the absence of oxygen. So it's heated it up to about 600°F without oxygen. And it drives off volatile gases, including things like chlorine and other things that we don't want going through our power plant. And we're doing that outside of the fence. So it's not actually something we have to worry about in the power plant and the regulations of the power plant.
We can drive off volatile chemicals at the facility that's making the pellets and that's treated differently than if it were at the power plant and one of the side benefits of this process of pyrolysis is that the material actually becomes really hard. It's like roasting a coffee bean and the material becomes hard and kind of impervious to water. So then it's something we could actually just pile and store outside on the ground like we used to do with coal for 100 years, so it will give us options for fuel storage. So everyone's talking about batteries and four-hour batteries, 12-hour batteries. We're looking at a solution where we can have a month of fuel or more that can sit there for decades, right? So think about that talking about dealing with ice storms or other sort of natural disasters.
We're really trying to position ourselves...[to] preserve our asset for future generations and then we can be resilient and run if the grid were to collapse. So could that be replicated elsewhere? Back to that question, I believe that there are opportunities to look at this elsewhere. It's really do you still have a boiler that hasn't been decommissioned or converted to natural gas that could take a solid fuel other than pulverized coal?
Paul Ciampoli
Thanks for walking us through that, Troy.
I just wanted to switch gears a little bit and talk about solar energy. As you know, Manitowoc Public Utilities in conjunction with GRNE Solar is building a community solar project in Manitowoc.
Can you offer additional details on this and discuss how customers of the utility are going to benefit from the project?
Troy Adams
We are one of the very few states where public power is regulated by the state Public Service Commission, so we are rate regulated. I had been in Minnesota before coming here. So that was a change for me to kind of deal with that process where in Minnesota we were really able to do almost like a rapid response through rate design to any situation that came up. Coming here, it's a different situation and it takes a little bit more planning.
We wanted to do something that made solar accessible...community solar is accessible to low income people that were in apartment buildings. But a lot of community solar projects were set up where there's some sort of buy in which is a barrier to low income...[as] a utility, we just get a PPA for solar for some developer. And there isn't always a buy in. You know, there isn't equity that you have to put in upfront. You're just entering into a contract.
Why couldn't we do something like that for our customers who don't want to have an upfront cost, they just want to commit to having solar and they want to be able to see it in their town. You know it's not something that's on paper. You can actually drive past this local solar garden. So we went to the Public Service Commission of Wisconsin and pitched that idea. They loved it, they supported that.
We ended up developing a rate to do that for a pilot project for a 1 MW community solar garden with that type of contract and got overwhelming support from the community where we had a waiting list...before we had even broken ground, we had to go back to the Public Service Commission and increase the size of the project. So in the end, our rate from that project is going to be about 7 cents kW, whereas our retail rate is 9, so it's actually going to be a lower cost for signing up for that. So we're excited about that -- it offers up something and it's not subsidized by those that don't participate, it happens to just be a stand alone project that we structured the financing for it so that people don't have to have a buy in fee or equity contribution for that.
It was supposed to go live in June and we're waiting -- this is probably a story that you hear from everyone -- we're waiting on some issues with some of the electrical gear and hope that it goes live in July now.
Paul Ciampoli
So it sounds like there was an advantage in terms of perhaps you know starting smaller in terms of the MW size and getting a kind of an initial reaction from the community then expanding, is that fair to say?
Troy Adams
Yeah, that's fair to say. Obviously, the bigger you build it, you get some economies of scale and you lower some of the fixed costs. In this case starting small didn't have any adverse effect to pricing. It ended up being lower cost than what our retail rate was anyway, so starting smaller in this case helped us out. Since we entered into this agreement for this facility, you've seen solar prices go up, so I don't know that you'd get the same type of pricing right now.
We already had solar panels on site before pricing started going up, but an opportunity that we took advantage of at the right time, and it's going to pay off nicely for our customers.
Paul Ciampoli
Great. Thanks, Troy.
For my last question, I want to talk about recognition that the utility has earned from APPA and as you know specifically earlier this year the utility announced it earned APPA Safety Award of Excellence for safe operating practices and also earned a diamond level Reliable Public Power Provider designation from APPA for providing reliable and safe electric service.
So against that background, can you offer details on the steps the utility has taken to earn this recognition?
Troy Adams
Well, at least for us, and I would imagine with everyone, safety is foundational. Safety culture is the most important thing in any utility -- more important than rates and reliability, although those are extremely important. Safety is the primary goal for all utilities. So that's the same here. Happy to have received the recognition -- it really just affirms that we have a safety culture that's healthy and people are looking out for each other to make sure that they go home every night to their families.
The RP3 program is a wonderful program and full disclosure, I was on the RP3 panel for the last seven years. Great experience for me. I grew as a leader in public power through that process because you get to see the best of the best and that program is designed to push utilities to use best practices.
It's funny how humans work. If you challenge people to say this is best practice, they're going to continually try and get better. So RP3 establishes that bar of best practice and utilities that are participating in that -- just by no other reason than participating in it, continually get better because they're reading about best practices as they're reading the application and their utilities are evolving their policies and processes to be best practice, so it's a wonderful thing that APPA had created and love that it's helping public power become more successful, more sustainable and put us in a better position within our communities.
Paul Ciampoli
Any further thoughts or details you want to offer specifically is one of the things that comes to mind is -- maintaining high levels of reliability.
Troy Adams
There are so many pieces that go into reliability. But I would offer this....one of the things that has helped us be successful through our RP3 or whatever it is, is having really good understanding from our governing body on what it takes to be reliable. And then supporting us through policy and budget to do the things that we need to do proactively.
Spend the money on vegetation management, infrared camera work, inspections, all of those things where you can make sure that your system is maintained at the best level that you can before you have issues or before your system starts to degrade. So putting the money in on the front end versus putting the money on the back end but that takes putting in the effort and making sure that your governing body, whether it's the city council or a separate Commission, understands the value of having a proactive approach to reliability.
And what does it mean that if you're not reliable? It's really hard to dig out of a position where your system isn't reliable and...there's some public outcry regarding your reliability. It puts your utility at risk to be sold or to have a big spend and put you at a position where your rates aren't competitive, so being proactive and having that communication and being able to bring your governing body along with the reason to be proactive and get their support on that.
Paul Ciampoli
So Troy, I would imagine that communication with customers is key in terms of highlighting your high levels of reliability?
Troy Adams
Absolutely. Communication with customers is as important as communication with your Commissioner, communication with your employees. I find it really interesting to watch as I'm talking about the rate of change and everything else -- rate of change of customer expectations is increasing exponentially as the generation shift of who is a homeowner who is an electricity buyer, their expectations and how they get communication has changed. What they want to be communicated has changed.
So planned outages, weather related outages all of that -- those are things that customers now want to have instant communication. I remember as a kid being in an IOU territory...[with] power going out all the time out, you know, out in a rural area. And people wouldn't call because they were so used to power going out all the time. And it was probably something like a tree branch hitting the line, but customers have a different expectation today. So putting in proactive vegetation management is important, yes, but also how you communicate with customers is equally important. You're absolutely right.
Paul Ciampoli
Troy, would you be open to returning as a guest at some point in the future? I'd love to talk to you about some of the things we talked about today.
Obviously, the power plant boiler refueling project I think would be worth revisiting, so I just wanted to throw that out there as an invitation to you.
Troy Adams
Absolutely. Anytime.
Paul Ciampoli
Great. Well, thanks again for joining us, Troy.
Thanks for listening to this episode of Public Power Now, which is produced by Julio Guerrero, Graphic and Digital Designer at APPA.
I'm Paul Ciampoli and we'll be back next week with more from the world of public power.
