Neumann CEO defends company record, progress

The new CEO for Neumann Systems Group says he doesn’t understand why the local company has become a “political whipping boy” for Colorado Springs leaders.

NSG, which is installing a clean-coal scrubber at the Martin Drake Power Plant near downtown, has been under fire for months – constantly battling misconceptions and falsehoods, said Todd Tiahrt, a former conservative Republican congressman from Kansas who took over as CEO from founder/owner Dave Neumann earlier this year.

“I can’t figure it out,” Tiahrt said Friday in an interview with the Business Journal. “We’ve gotten buy-in from the Colorado Department of Public Health. We’ve gotten certification from the Electric Power Research Institute; they looked over our shoulder and gave us an A+. There must be some sort of financial gain I’m not seeing here.”

Neumann Systems Group created the NeuStream thanks in large part to a design contract with Colorado Springs Utilities, which allowed NSG to test the new technology at the plant, in exchange for a portion of the proceeds once it’s in production. The contract is to remove 97 percent of sulfur dioxide from coal emissions, using less water, taking up less space and at less expense.

It’s attracted interest at both the state and federal levels. The Colorado Department of Public Health and Environment rewrote its regional haze regulations to allow Utilities to use the technology. And an outside engineering firm, Stanley Consulting, studied the financials behind the NeuStream and reported that it is less costly than other scrubbers, Tiahrt said.

“For every argument, we have an answer,” Tiahrt said. “But they aren’t listening. We have a mayor who promised 6,000 jobs, and instead, we’ve gone backward. Why try to run us out of town? We have the potential to create hundreds of new jobs.”

The contract started in 2008, but last year, Mayor Steve Bach raised the prospect of closing Drake and possibly tearing it down. Since then, Bach and Councilor Tim Leigh have attacked the contract with Neumann and the technology behind it. Much of what they claim is false, Tiahrt said.

When he first arrived, Tiahrt, who served two terms in Congress representing Kansas before starting a technology consulting group, tried to meet with Bach.

“I wanted to meet in his office,” he says. “But someone else called me on his behalf, and wanted to meet at 6:30 a.m. at a private residence. That’s a little too secretive for me. I declined. I believe in sunshine and transparency.”

Dave Neumann, who still serves as president of NSG’s board, said the mayor was creating a toxic business environment in which his company could not survive.  He said the company recently laid off Rob Fredell, vice president of marketing, and “about 10” other people due to the uncertainty.

Bach has denied that Tiahrt contacted him, and said that the company should work solely with City Council, which has legal authority over CSU.

“Neither his (Neumann’s) firm, his new CEO or he has attempted to make an appointment with me,” Bach said in an email. “I would be glad to meet with them, but do not see the relevance given that Mr. Neumann’s company is a vendor for CSU, which is controlled by City Council acting as the Utility Board … Mr. Neumann’s suggestion that I am somehow impeding his company’s success is also false.”

Tiahrt said the company has been making progress, despite the uncertainty created by the political atmosphere in the Springs. It has an $11 million contract with the Energy and Environmental Research Center in Grand Forks, N.D., to use the NeuStream to capture carbon from coal emissions.

While still in the development stages, the company has also received a grant from the federal government to perfect the technology, which would create compressed carbon dioxide from coal emissions and allow oil companies to use it to extract oil from sands deep in the earth.

“They’ve been doing this for about 20 years, piping carbon dioxide from Sheep Mountain in Colorado, where it occurs naturally, and sending it to Texas and Oklahoma,” Tiahrt said. “There’s a market for this. And it’s green, because if there’s a carbon dioxide leak, it escapes into the atmosphere just like when we exhale.”

Tiahrt said he was optimistic the company could overcome the “political bump” that’s coming through City Council elections in April. In the meantime, he said, Neumann Systems Group is complying with its contract with CSU.

“Our contract is under cost,” he said. “And we’re proud of that. The construction contract came in higher than expected, so we’re working with CSU to mitigate that.”

That could mean installing the Neustream first at a single boiler at Drake, and then moving to the second, he said.

As far as Neumann’s frustration with the political process, Tiahrt said that was understandable.

“He’s trying to protect his intellectual property, his company and his employees – all of which are under attack,” he said. “I think he’s handling it better than some people would. Some people might pull up stakes and leave.”

Click here to read Neumann’s email about the mayor, city attorney and Leigh.

 

 

 

 

3 Responses to Neumann CEO defends company record, progress

  1. I’ve been observing all of this for the last six or nine months, wondering when someone was going to state the obvious: The city signed a contract with Neumann. When did “our word” (as reflected in the legal document, signed by the city authorities) not obligate us to meet our commitments under the terms of the agreement.

    In the last several years, I’ve seen a growing tendency in business to willfully ignore the terms of a contract that were voluntarily agreed to by both parties. It pains, saddens and disappoints me to think that our elected officials would advocate doing such a thing. It is shameful! It appears (as an outside observer) that Neumann Systems has done all that they were obligated to do, yet some of our elected city officials seem reluctant to do that same. Truly shameful!

    Jeff
    March 1, 2013 at 4:44 pm

  2. Well said Jeff! And now it’s time to vote out the ones who are not operating in the best interests of the citizen who own these assets.

    Mark
    March 2, 2013 at 1:31 am

  3. Well, if Newmann is against the Mayor, that means something is amiss at Newmann.

    Janet
    March 2, 2013 at 2:01 pm