Upon arriving at the polluted industrial town of Gringey City, Ash, Misty, and Brock notice that Pikachu has become faint and sparks are coming out of his cheeks. They subsequently rush to the Pokémon Center as they are watched by a shadowy Pokémon, as well as Meowth. Jessie and James begin to do the motto, though the stench forces them to stop. Meowth, who is inside his own contained device, gives them scuba suits to wear, and says he will stay there to pump oxygen and fresh air to them. He instructs them to dive into the water and swim through the pipes to the Pokémon Center, but they refuse. As a result, Meowth pushes a button that delivers Jessie and James an electric shock, and they reluctantly enter the sludge-filled sewer waters.
At the Center, Ash finds an uncharacteristically irritable Nurse Joy, who dismisses Pikachu's condition as a cold. When Ash yells at her for not being very helpful, she explains that the sparks coming out of Pikachu's cheeks are an early symptom of a cold in Electric rodent Pokémon. She suggests that they leave Pikachu there for the night, and he will be fine in the morning.
At the same time, a large group of Grimer block the water flow into the hydroelectric power plant, causing the power to go out. This also stops the power supply to Team Rocket's scuba equipment and affects the Pokémon Center's intensive care unit, but Meowth manages to get Jessie and James back on the surface level. Ash, Misty, and Brock decide to head for the power plant to try to do something; Pikachu cries out as they leave. They receive directions from Officer Jenny, and Pikachu comes out of the nearby bushes. Misty realizes that Pikachu was afraid that they wouldn't return for him later, so Ash decides to let him come along. Pikachu jumps into Ash's arms and receives a shock, the shadowy Pokémon watches from a nearby bush.
The group enters the power plant and notice that nobody is there to greet them. Misty locates a map and points out the direction to the central control room. Misty gets spooked as something flies behind her. Ash calls out Misty's cowardice, though soon after, she and Brock spot something behind Ash. He turns around though nobody is there. The shadowy figure, with a glowing blue eye, appears behind Pikachu. Fearing the worst, Ash looks it up on the Pokédex and the mysterious creature is revealed to be a Magnemite, the Magnet Pokémon. Ash decides to try to catch it, but Magnemite only seems interested in Pikachu, and begins to follow him. Ash yells at the Magnemite to cut it out, and the Magnemite backs off.
A nasty stench then enters the corridor. They turn around to see a grating fall off the ceiling, followed by several Grimer. Brock decides that it would be best not to say anything to insult their pride. Ash pretends to compliment their unique smell, but Misty says it stinks, and the leader of the Grimer, a Muk, rises from behind them. With a command from Muk, the Grimer attack, insulted by Misty's comment. Ash, Misty, Brock, and Pikachu run. As they round the corner, they bump into two plant workers. The Grimer approach, and they all start running for the control room. They all hide in the control room, and Brock bolsters the door shut. One of the workers explains that the Grimer are clogging the sea intake valve, preventing the power from coming back on. The Grimer throw themselves at the door and soon bust it open. Pikachu uses his Thunder Shock attack to knock out some of the Grimer, but it isn't enough. Suddenly, the Magnemite knock out the control room's ceiling grate, and several Magnemite and Magneton arrive. Their combined electric attack proves effective and they manage to also scare off the Grimer blocking the flow of water into the power plant, and the power is restored.
However, the Muk leader remains. Pikachu uses Thunder Shock, and Pikachu's obsessed Magnemite assists with a Thunder Shock of its own. The combined electric attacks knock the Muk unconscious, and Ash catches it in a Poké Ball. To his discontent, he realizes that the smell of the Muk comes through the Poké Ball. Later, Pikachu seems to be a lot better, and one of the power plant workers explains that when an electric mouse builds up too much electricity, its body becomes magnetized and it seems as though it has a cold. Magnemite was in love with Pikachu because he was magnetized, but now that Pikachu is better, Magnemite is no longer interested.
Suddenly, a Gyarados submarine comes out of the water with a large magnet attached to it. Team Rocket intends to use the magnet to capture Pikachu, unaware that Pikachu is no longer magnetized. When they activate the magnet, Magnemite and Magneton from all over town become stuck onto it, and their combined weight causes the sub to sink. As Ash and the others prepare to leave Gringey City, they mention that the Grimer horde was a sign that the town needed to be cleaned up and suggest that if the residents clean up the air and water, they will restore the city to its former glory. Taking the advice to heart, Nurse Joy and Officer Jenny bid farewell to them.
Meanwhile, at Professor Oak's lab, a Poké Ball arrives from Ash. As Professor Oak wonders what Ash caught this time, the Poké Ball opens up, and Professor Oak covers his nose in disgust as Muk appears.