MUSCATINE, Iowa —More water will be flowing in Muscatine this fall, but less money has flowed into Muscatine’s public utility this year.

The Board of Water, Electric and Communications Trustees approved drilling a new well, but got a less-than-glowing financial update at its regular meeting Tuesday night.

The Board voted unanimously Tuesday evening to contract with Northway Corp. of Marion to drill a new well at Muscatine Power and Water’s main well field. The new well will cost $159,281.

Well 41 will replace Well 16, which was installed in 1968. Well 16 can produce 360 gallons of water per minute, while Well 41 will be able to produce 1,000 to 1,500 gallons per minute. The new well will be drilled about 25 to 50 feet from the existing well and much of the existing infrastructure will be reused.

MP&W also sought bids to replace Well 17, but opted to hold off on that project due to budget constraints.

The trustees also authorized the Water Utility to borrow up to $494,000 from the Iowa Department of Natural Resources State Revolving Loan Fund to replace eight well motor controls with more efficient variable frequency drives. The bids for the project totaled $331,159.

The utility planned to replace the drives over the next three years. However, stimulus funds from the federal American Recovery and Reinvestment Act of 2009 will pay for 20 percent of the “green” water project and it is eligible for an interest rate of 3.25 percent.

Vice Chairman Gary Carlson praised the MP&W staff. “Good job of going and getting low-cost dollars.”

MP&W general manager Sal LoBianco told the trustees his staff will apply for additional grant money in upcoming weeks for other energy conservation projects.

In other action

- Donald Kerker, MP&W director of finance and administrative services, reported finances continue to be grim for MP&W. The Power Utility was budgeted to lose $1.2 million, but is down $6.5 million, primarily due to the national decline in demand for wholesale power. Kerker said most electric companies have not been hit as hard as MP&W because they do not have as much excess production capacity and do not sell as much wholesale power.

“We have been so fortunate with the excess capacity for a long time,” he said.

In addition to the soft wholesale market, demand for electricity in Muscatine is down 7.5 percent this year.

The Water Utility was budgeted to have a net income of $66,000, but has lost $27,000. The Communications Utility was the one bright spot with a loss of $7,000 less than the $960,000 it was budgeted to lose.

LoBianco announced MP&W will join Midwest Independent Transmission System Operator Inc. at midnight on Monday, Aug. 31. Membership in the system will make it easier for MP&W to transmit the power it sells on the wholesale market and easier for the utility to purchase wholesale power when it’s needed.

“The difference is we won’t be scrambling to find power when Unit 9 is down,” he said. “It will just be another day in the life.”

- The Board voted to designate Oct. 4-10 as Public Power Week and ask the Muscatine City Council to pass a similar resolution.