Iowa public utility Muscatine Power and Water plans to issue debt in the negotiated market on Wednesday as Piper Sandler will price $100 million of electric revenue bonds for the utility.
The Series 2026A and B bonds will finance the installation of a 35 megawatt combined heat and power unit ("EcoGen 10") and the construction of a natural gas pipeline.
The Series 2026AB bonds also include funds for the Solar 1 project; effluent limit guidelines compliance work; a rebuilt Grandview substation and other projects, according to an online investor presentation.
MPW expects to sell $80 million of additional bonds as soon as fall 2026 for Solar 1, a 24-MW solar farm, and other projects. It plans to return to market in 2028, selling another $20 million of bonds for a 20-MW solar farm known as Solar 2.
Moody's Ratings assigns an underlying rating of A1 to the $90 million of Series 2026A electric revenue bonds and $10 million of Series 2026B taxable electric revenue bonds.
MPW expects an insured rating of AA from S&P Global Ratings after the bonds are wrapped by Assured Guaranty, the utility said in its
S&P said on Thursday it has not yet issued a rating for the bonds.
Bond counsel on the deal is Dorsey & Whitney LLP. MPW General Manager Gage Huston said MPW is not using an independent financial advisor.
No debt senior to this issue is allowed, according to the investor presentation.
The utility has about $11 million in outstanding principal on the $14.86 million of water revenue bonds it issued in 2017, which have a final maturity of December 2037.
The utility is trying to increase power production and baseload generation reliability, as well as transition from coal-fired power to natural gas and solar to lower CO2 emissions.
It is also aiming to stabilize rates, diversify fuel sources, gain redundant supply equipment and get newer, more reliable equipment, the presentation said.
"Like a lot of utilities, we're in the midst of an evolution of our power generation portfolio," Huston said. "We're keeping rates affordable and competitive while also improving our sustainability."
MPW currently has 13 MW of non-coal capacity, out of 288 MW total capacity. The utility plans to eventually bump non-coal capacity up to 112 MW.
MPW aims to cut coal from 95.5% of total capacity to 61%. It plans to retire one coal-fired unit and convert another to gas-fired upon completion of the EcoGen 10 project.
The 2026AB bonds are solely supported by the net revenues of the electric utility. MPW's board of trustees -can authorize changes to rates as needed, according to the investor presentation.
A 5.1% rate increase taking effect July 1, 2026, has been approved by the board, after increases of 1% to 2% from 2020 to 2024.
MPW sells the energy it generates into the Midcontinent Independent System Operator, or MISO. It then buys energy for local generation from the MISO market. It also buys capacity from the MISO market through MISO's annual auction.
In a MISO planning resource auction last year, capacity prices for summer 2025 jumped to $666.50/MW-day from $30/MW-day in 2024 across the MISO footprint, according to
The investor presentation noted, "recent capacity prices have been volatile."
"Those prices did effectively come down later," Huston said. "It's part of a bigger trend. … We're seeing the combination of retirement of a lot of dispatchable resources and then more intermittent resources coming onto the system, like wind and solar, and clogged interconnection queues. Other ISOs are in a similar boat of having queues that are backed up."
Huston said price volatility didn't directly impact plans for the projects funded by this deal.
"We do pretty comprehensive power supply study reviews just focused on what our needs are for our local system," he said.
MPW also has an energy adjustment clause, which protects liquidity if MISO energy prices increase and MPW generation units are unavailable. While such a clause is "common," Huston said, its use is "something that we are not anticipating."
Still, capacity prices reached $217/MW-day for
An 832-square-foot data center is planned for Muscatine, according to a Feb. 2
"I currently have no applications that have been submitted for any additional data centers," said Muscatine County Development Director Eric Furnas. But "we never know what companies are looking at land."
Muscatine County has one data center that is operational. It's on the outskirts in unincorporated Muscatine County — "a fairly small crypto facility," said Furnas.
In May 2025, the county board
"We did amend our zoning ordinance to further limit or regulate what zoning districts they could be permitted in," Furnas said. "Because that industry is changing, and some of them are very, very large, and can have a significant impact."
MPW provides electricity, water, internet, TV and phone services to Muscatine and Fruitland, Iowa. It is run by a board of trustees appointed by the mayor of the city of Muscatine and approved by the city council.
