Subscribe to our Newsletter


Power Substation

Substation Construction

April 30, 2021

Substation Construction


bringing project planning, design
and financial evaluation together

Stanhope Municipal Utilities Constructs Substation

Project Owner:
Stanhope Municipal Utilties

Key Experience:

  • Responsibility and involvement in all phases of the project, from project feasibility to final testing and checkout
  • High-level of coordination among multiple entities

Key Features:

  • Construction of a new 69-12.47 kV Substation
  • Delta to Wye distribution system conversion
  • Detailed financial modeling of alternatives
  • Electric retail rate development

In 2015, Stanhope Municipal Utilities (SMU), located in the small central Iowa community of Stanhope, faced some difficult decisions. The regional electric transmission system operator in the area was planning to upgrade the voltage of its lines. This process would eliminate the distribution substation, which at that time was located on the outskirts of Stanhope. SMU received service at distribution voltage from the substation. DGR Engineering (DGR) was engaged to assist SMU with evaluation of alternatives, as well as to determine how any resulting facilities could be financed.

Following initial evaluation, the two most-promising options were recommended. Option 1 included taking service at distribution voltage from the regional transmission system via a radial line of approximately 10 miles in length. Option 2 involved SMU constructing its own substation in Stanhope, connecting to the recently-upgraded transmission system. In both cases, the operating voltage of the distribution system in the community would need to be changed from 7.2kV delta to 12.47/7.2kV grounded wye.

In addition to developing an initial electrical plan for each option, cost estimates for both were also developed. For Option 1, a monthly charge representing “rental” of the facilities would have been required. For Option 2, SMU would need to arrange for and ultimately re-pay the loan needed to finance the construction of the new substation and conversion of the distribution system.


To allow SMU staff and the City Council to make a detailed evaluation of the recommended alternatives, a financial model was developed for the electric utility. This model provided a multi-year review of the impact on electric rate revenue needed to support both alternatives. Throughout the process, DGR coordinated closely with SMU’s financial advisor, Michael Maloney with the D. A. Davidson Company, to ensure the most advantageous structure for payment of debt service.

After careful consideration of the alternatives and rate impacts on its customer base, SMU approved proceeding with Option 2: construction of its own substation and “wye-ing out” its distribution system.

Following the decision, a full cost-of-service rate study was completed for SMU’s customers. The study evaluated the best alternatives for defining customer rate classes and developed appropriate structures for the retail rates paid by all customers.

This study also allocated the costs of providing service to the proposed rate classes, with the goal of having each rate class pay its fair share of the costs of operating the electric system (including covering its share of the cost of the proposed facilities).

The proposed rate changes were adopted, which led to SMU successfully issuing electric revenue bonds, with an overall interest rate averaging less than 3%, covering maturities of up to 20 years.

The project construction process involved a high level of coordination among many parties. The Stanhope City Clerk, Jessica Murray, coordinated activities at the local level. Public bidding processes were used to acquire major materials and contractors to build the new substation and convert the distribution system. Adam Dickinson from the neighboring Webster City Municipal Utilities (SMU’s electric system operations & maintenance provider) directed much of the complicated process of cutting over to the new facilities, aided by DGR engineers and field technicians.

Not only was the project completed in time to coordinate with the regional transmission system voltage upgrade, but the overall cost of the project was significantly under the original project estimate. Costs were reduced due to some of the unique ways the materials acquisition and construction processes were executed.

Funds for the work were obtained at reasonable long-term cost to SMU, and the new retail rates necessary to support the debt service were implemented. Overall, DGR was able to assist SMU in all aspects of the project, from initial evaluation,to design and financing, through final construction.

100_7016 edit

Substation Conversion

April 29, 2021

Substation Conversion

Pella Substation

City of Pella Improves

Electrical Reliability

Missouri River Energy Services Adds
Interconnection at Pella's West Substation

Project Owner:
City of Pella, IA

Key Experience:

  • Multi-phase construction
  • Coordination among multiple stakeholders

Key Features:

  • 28 MW of local generation
  • Three existing 69 kV transmission terminals
  • Reconstruction required to continue to serve existing load

The City of Pella, Iowa identified a need for additional 15 kV distribution feeders at their West Substation. The existing substation was a single 69 kV bus arrangement, with three 69 kV transmission line terminals, one power transformer and associated 15 kV distribution switchgear. Also included was a generator step-up transformer with a 15 kV generation switchgear bus, and a 69 kV capacitor bank.

Missouri River Energy Services (MRES) is installing 55 MW of hydroelectric generation at the Red Rock Reservoir on the Des Moines River near Pella, and needed access to the transmission grid for the generation output. MRES requested a 69 kV point of interconnection at Pella’s West Substation.

The existing bus arrangement at the West Substation could not support another 69 kV transmission line terminal. Pella contracted with DGR Engineering to develop different substation bus plans and cost estimates to accommodate the new 69 kV point of interconnection for MRES and a new power transformer and 15 kV distribution switchgear for the Substation.

DGR Engineering developed multiple conceptual substation layouts and cost estimates for the proposed substation. The City of Pella opted to proceed and construct a six position 69 kV ring bus plan. The selected plan would increase the reliability of West Substation and provide the City of Pella with additional distribution feeders, and provide MRES with a 69 kV interconnection.

One of the challenges of the proposed ring bus was maintaining service to the existing power transformer serving the distribution switchgear. The construction of the 69 kV ring bus was staged in multiple phases to accommodate this requirement. In addition, the step-up transformer for the generation switchgear was repurposed to provide additional capacity for a new 15 kV distribution switchgear.


Substation Expansion

April 16, 2021

OPU needed expanded power transformer capacity to accommodate growing customer power needs at the West Owatonna substation, but faced contingency issues connecting into the substation’s 69 kV buses. To address this design limitation, DGR Engineering designed a joint 161 kV project with OPU and SMMPA, OPU’s power supplier.

Electrical Distribution Conversion

October 4, 2018

The project included full services for the conversion of the utility’s distribution circuitry from overhead to underground.  The conversion was completed in several project phases as part of a multi-year process.  The project also included the construction of several new circuits that were integrated to new substations being built in the same timeframe.  DGR services for the project included the reliability study work, preliminary planning, permitting, engineering design, material procurement assistance, construction administration, and resident project observation.

Generating Plant

October 4, 2018

The project included full services for the construction of a new generation plant and substation.  Cost savings for the Owner were achieved by combining a substation project and a generation plant project, in order that shared facilities could be constructed.

DGR services for this project included project feasibility, environmental permitting, engineering design, material procurement, and construction administration.