Utilities gamble might be community’s loss

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If you can’t take the heat, get out of the kitchen.

Chefs know that. Perhaps politicians and public officials should learn from them.

In a news release about a new technology to sequester sulfur dioxide from coal-fired power plants, Scott Hente, chairman of the board of directors for Colorado Springs Utilities, said: “This is great news for our community. NeuStream will save money for Colorado Springs Utilities’ ratepayers because it will be installed at lower cost than traditional scrubbing technology and will require less operating and maintenance expenditures.”

Coming from a non-expert who is embroiled in legal disputes, as the Gazette has reported, can we trust his judgment?

This is the same guy whose judgment about the default on the Urban Renewal Authority’s N. Nevada project, according to the Gazette was: “The deal was good. The deal still is good.”

You may dislike Mayor Steve Bach, but at least he initiated an inspection of the URA because of concerns about the way the board handled its finances.

Should Hente resign and take care of his personal affairs? After all, we don’t pay him enough to divest himself from his real estate deals, unlike the salary we give the mayor to focus on city affairs.

This is what we should fear: the unwarranted sanction of the work of others by politicians who are not experts. Relying exclusively on reports generated by the Urban Renewal Authority or Colorado Springs Utilities is like never asking for a second opinion before major surgery. It’s unwise, and it could be costly.

Neither Hente or CSU CEO Jerry Forte fully disclosed that the NeuStream technology is experimental and untested — it’s being vetted as it’s being used. Does it matter that CSU is a “pilot project” with a $7.2 million award from the DOE? Is anyone alarmed about the $17 million that was spent as of Sept. 3, 2010, on this project, and even more alarmed that an estimated $180 million will be spent during the life of the project?

CSU’s answer is that without Neumann’s experimental technology $360 million will be spent “to control SOX (sulfur dioxide), NOX (nitrogen dioxide) and other particulates.” So, it sounds reasonable — even responsible — to spend half of that amount on an alternative.

But the question remains: is Neumann’s solution the best alternative?

It’s not that local engineers shouldn’t be consulted. Neither should we eschew local expertise just because it’s local. It is one thing to solicit local advice and quite another to commit large sums of money as a gamble on what might be the greatest success or the worst failure.

Xcel, for example, has not chosen Neumann, but is considering a multi-pronged approach to dealing with EPA requirements: retiring some plants, retrofitting others and using different sources of energy. Has CSU’s leadership spoken to Xcel’s executives and solicited their advice?

CSU’s Grossman responded to my inquiries:

“The EPA and the state of Colorado require Colorado Springs Utilities to comply with new stricter emissions control equipment at our power plants by 2016. Using conventional scrubber equipment, the cost to comply would be an estimated $300 million or more. Installing Neumann Systems Group’s air purification device instead of conventional scrubbers is projected to save at least $100 million. So far, approximately $40 million has been spent on testing, designing and implementation. Installation is expected to begin in September 2012.”

Though these numbers differ from the CSU’s News Release and CSBJ’s articles quoted above, CSU remains on message: this is a good technology, even if not fully tested. Don’t question us. All we need from council is a yes vote anytime they convene as our board.

Lest I be accused of not accurately reporting the facts, let me reassure everyone that mine are wild speculations whose veracity is open to challenge. Unfortunately, neither Forte nor Hente are forthcoming, so I must stay at the speculative level.

It’s difficult to report facts when CSU stonewalls the public. For example, when I asked about cost-savings at the utilities’ motor pool, all I could get is a chart dated Nov. 28, 2011, about the percentage of vehicle categories and a report from Jan. 7, 2008, from Mercury.

In 2007 CSU had 1,754 “units” whose replacement cost was $74 million. With an average “replacement spending (since 2000)” of $5.3 million annually, who is overseeing this process? One wonders if anyone is digging deep down this rabbit-hole to make sure that a 10 percent saving on this “average” could be achieved. Perhaps it’s done, but how would we know?

Last time we trusted officials in large institutions without political or regulatory oversight, we got the mortgage bubble. Let’s pray we don’t face a local energy-rate bubble.

Raphael Sassower is professor of philosophy at UCCS and is still waiting to meet with CSU’s CEO Jerry Forte or Chairman Scott Hente. He can be reached at rsassower@gmail.com See previous articles at sassower.blogspot.com