E-mails from City Councilor Tim Leigh about Colorado Springs Utilities have drawn a response from Utilities CEO Jerry Forte – but that response might have fallen on deaf ears.
Leigh routinely regularly sends out his “Market Report” e-mails to a selective distribution list. The Market Report was initiated when Leigh worked as a commercial broker, and they offered insider market information. But, since Leigh was elected to City Council, they’ve become something different. The e-mails now offer his views on topics that he deems relevant to his work on City Council.
The e-mails have been the catalyst for many discussions about the future of the Martin Drake Power Plant, as well as the ownership and governance of Colorado Springs Utilities.
But his Sept. 20 e-mail was the one that got Forte’s attention.
The e-mail said CSU could solve its the regional-haze compliance problem for $88.1 million, much less than the $121 million NeuStream, an experimental scrubber, would cost to reach compliance.
Forte sent an e-mail of his own to Leigh, questioning his numbers and assumptions.
That e-mail, obtained by the Business Journal, said:
“The cost for LSD scrubbers (lime spray scrubbers) is out of date and does not reflect the current cost of pollution controls,” Forte said. “A subsequent cost evaluation of scrubbers on Drake 6 and 7…to be approximately $158 million. This evaluation used more refined assumption, more recent commodity pricing and is a better reflection of today’s pollution control marketplace. The determination to proceed with the NeuStream scrubber at a total cost of $121 million was made in light of this more refined information.”
Forte went on to request a correction, but Leigh said he didn’t read the email from Forte.
Leigh has been a vocal critic of the NeuStream, a wet coal scrubber that’s been tested at smaller levels and is now being installed at Drake. His complaints are not only about the experimental nature of the scrubber, but about the nature of the contract and the costs of installing it.
Leigh says that the debate the NeuStream is merely “an interesting side conversation” to the larger questions about CSU.
“Really, the big question is about their budget strategy,” he said. “We keep funding the capital expenses at exorbitant costs. How much more can they raise rates? And how much longer can they get the financing they need?
Forte also took issue with Leigh’s statement that CSU will have to spend roughly $82.5 million next year to comply with mandates to clean ozone from coal emissions – something the NeuStream doesn’t do. Forte said the statement was a “forward-looking statement to inform potential investors to the possible risk of future regulations even when there is no certainty of the degree of impact these regulations may have.”
That statement made Leigh wonder if anyone knew if CSU had a long-range plan for meeting potential future EPA regulations.
“Here’s the problem. We’re going to run out of borrowing power. Do we have a 10-year plan to deal with EPA, or are we just hoping we can deal with it when it comes?” he asked. “I don’t know the answer. I can’t get answers from management. I’ve had some discussions with them, and we’re starting to have more.”
Leigh said he also plans to seek outside authority to get unbiased answers from people without a stake in the outcome.
In the meantime, he supports a task force to examine the issues– possibly headed up by the Regional Leadership Forum or the Colorado Springs Regional Business Alliance, formerly the Greater Colorado Springs Chamber and EDC.
“We need to do the same thing with Utilities that we did with Memorial,” he said. “When we received the RFPs from interested people, it was my vote that kept Memorial’s proposal from being at the top. I did that on purpose. And now we have an arrangement that’s very good for the city. We need that same deal with Utilities. I don’t mind being the sole voice saying so.”
But Forte wants to be consulted before Leigh sends out any more emails about CSU.
“It would be helpful if you could work with staff prior to issuing statements that may miss significant facts, timing or context. I would also very much appreciate it if you could issue an appropriate correction of the facts to your distribution list,” he said.