The Colorado Springs Chamber/EDC has become the latest group to weigh in on the issues of decommissioning the Martin Drake Power Plant and the governance and ownership of the Colorado Springs Utilities.
“They’re just the latest,” said Councilor Tim Leigh, who also sits on the Utilities board. “The RLF (Regional Leadership Forum) is interested in leading this discussion, and we’ve had a lot of private business leaders want to lead it too. “
For months, the Utilities board, comprised of the City Council – has tossed around the idea of decommissioning Drake and tearing it down – a move first suggested by downtown business owners that claim the power plant dominates the skyline, blocks views of the mountains and inhibits economic development. The idea of shuttering Drake threw the future of the NeuStream, a clean-coal scrubber under experiment at Drake, into doubt. That’s as it should be, Leigh said.
“Who wrote that contract?” he asked. “It’s a horrible contract. It’s $125 million to Neumann (Systems Group) and they don’t bring anything to the table. It’s all experimental. And I don’t think they will ever, ever sell the product to anyone else. It’s just not going to happen.”
Utilities signed on to the NeuStream as a way to extend the life of Drake, because it’s a smaller, cheaper way of cleaning sulfur dioxide pollution from coal emissions. It’s been proven to work at several levels, and Neumann started construction of a full-size project at Drake this summer.
But the NeuStream and Utilities contractual obligations to NSG are just the “tip of the iceberg,” Leigh said.
“We need to examine all these contracts,” he said. “And it’s hard to get information from Utilities staff because it’s hard to know even how to frame the questions. That’s why I question if the council is competent to sit as the Utilities board.”
Changing the governance of Utilities has long been an issue for Leigh, who says that he trusts the Utilities’ upper-level management, but finds it difficult to direct them as a part-time councilor.
“And clearly, I think there are business leaders who question our decisions at Council,” he said. “There are people who are intelligent, who have money, who want to help us out. I don’t think the Chamber’s interest is malicious, I think they sincerely want to help.”
According to the letter written by Chamber/EDC chairman Doug Quimby, the group is asking for an “independent, perceived to be independent, transparent and credible process” much like the one that directed the lease of Memorial Health System. And they want the Council to hurry.
“We are ready, willing and able to oversee the economic impact analysis and provide other assistance,” Quimby wrote. “The Chamber and EDC Board believes it is imperative that the Drake study be conducted immediately to protect the long-term public interest of our community.”
And Quimby got specific. He’s asking for the following to be covered in a study about decommissioning Drake: determining the cost and timeline for possible decommissioning, evaluating power options should the facility be decommissioned, assessing the impact on customer rates across the options and analyzing the overall economic impact, including brownfield remediation of the site and the accompanying economic development opportunities for the site and surrounding areas.
Quimby did not take a stance on what happens with the NeuStream technology, instead he said “deciding how to proceed is the responsibility of the Utilities Board.”
However, Dave Neumann, owner of Neumann Systems Group and developer of the NeuStream, has some figures already available. In an email to Councilor Bernie Herpin, he says that federal government reports on gas plant costs show a “billion dollar increase in cost to the ratepayers from closing Drake and building a new gas plant.”
Neumann says natural gas sells internationally between $12 and $14/mmBTU for long-term rates. In the United States, it’s currently selling for $5/mmBTU. That could change as demand rises, he said.
“With new pipelines to the coast opening up and virtually unlimited international demand for natural gas, it will not be more than a few years before domestic prices reach equilibrium with international prices,” he wrote. “If that happens, a decision to close Drake would be even more catastrophic for the ratepayers.”
Neumann has much to lose if Utilities curtails the NeuStream project. He’s said in the past that it will shut down his company.
“Cancellation of the Martin Drake project would in all probability result in the shutdown of our business, the loss of many current and future jobs here in Colorado Springs and the loss of this great clean coal technology for both national and international use,” he told the CSBJ.
However, Utilities has the option of moving the technology to the Nixon power plant, a coal-fired plant that isn’t on the chopping block because of its location in southeastern El Paso County.
City Council has planned a special session 1 p.m. Sept. 26 in Council chambers to discuss the future of the power plant and CSU – and to hear the public’s comments about the process.