Much of our conceptual understanding of midlatitude atmospheric motion comes from two-layer quasi-geostrophic (QG) models. Traditionally, these QG models don’t include moisture, which accounts for an estimated 30-60% of the available energy of the atmosphere. The atmospheric moisture content is expected to increase under global warming, and therefore a theory for how moisture modifies atmospheric dynamics is crucial. We use a two-layer moist QG model with convective adjustment as a basis for analyzing how latent heat release and large-scale moisture gradients impact the scalings of a midlatitude system at the synoptic scale. In this model, the degree of saturation can be tuned independently of other moist parameters by enforcing a high rate of evaporation from the surface. This allows for study of the effects of latent heat release at saturation, without the intrinsic nonlinearity of precipitation. At saturation, this system is equivalent to the dry QG model under a rescaling of both length and time. This predicts that the most unstable mode shifts to smaller scales, the growth rates increase, and the inverse cascade extends to larger scales. We verify these results numerically and use them to verify a framework for the complete energetics of a moist system. We examine the spectral features of the energy transfer terms. This analysis shows that precipitation generates energy at small scales, while dry dynamics drive a significant broadening to larger scales. Cascades of energy are still observed in all terms, albeit without a clearly defined inertial range.