As most of you know from February 2006 through January 2010, I had the privilege of serving as Colorado Springs Utilities Chief Energy Services Officer.  It was during my tenure that most of the original application work for scrubber technology was completed.  After reading Councilman Tim Leigh’s diatribe on the efforts at Drake Station, I had to weigh in with my perspective.  This latest version is particularly concerning because it points to someone who “was there”.  Where were they, and more importantly, who are they?  The question of who is important because of the number of incorrect or misleading statements in Mr. Leigh’s Company Letter.  My question is; was the source credible and did Mr. Leigh understand what they were saying?

The first point I would like to address relates to compliance.  The only additional control technology that was going to be required at Drake was for SOx.  The NSG unit would effectively scrub other compounds but in review with our bond council, capitalizing work for say CO2 would not be appropriate because there was no compliance requirement.  I made the decision to focus on SOx because of the State’s impending EPA implementation plan.  I have no idea what Mr. Leigh means by “48 other existing technologies that solved the SOX problem with less capital cost”.  We found no other technology that would meet Mr. Leigh’s claim.  Coal Fired Electric Generation stations are highly engineered facilities based on many factors including era and type of equipment, manufacturer, site constraints, coal type, and combustion byproduct handling requirements, etc.  “Conventional” scrubbers today are engineered for a specific plant and unit with these site specific issues in mind.  In other words, there is no off the shelf solution for flew gas desulfurization FGD technology.  My final point is that through this period of analysis and application engineering, Drew Rankin worked for me, and if he had recommended “killing the baby” (a phrase that I personally find reprehensible), that would have come through my office.  Drew did not recommend canceling the project to me and in fact he continued to be an avid supporter as he led this project for the Energy Services Division.

M. Thomas Black, PE

Colorado Springs

Here is the original letter from Leigh that sparked the debate:

Friday, July 27, 2012

To:  All Council

Thank you for considering the idea of a task force to study the Drake decommissioning and the Neumann systems spend controversy.  While I appreciate the gesture, I don’t think a task force goes far enough, quickly enough, and my fear is that we spend unnecessarily on Drake when other less costly alternatives may be available.

The premise has been, “we’re in so deep that we can’t get out”.  Truly, if you’re digging a hole and you want out, the 1^st step is to stop digging.  If we wrote-off the aggregate spend on Neumann to date, we would be millions ahead than if we continue “the spend” at Drake amortizing the cost over 30 years, and then resolve to shelf the facility in any time shorter than the amortized term (10, 15, 20 years, etc).

Since our pre-council meeting Tuesday, where the Task Force plan was hatched, I’ve received new information about the history of the Neumann conversation by folks who were present at the time.  I know – another wild, Tim Leigh idea – [search for the facts from someone who was there] – startling!

– I was told Drew Rankin brought Neumann forward “as someone with new technology that could save CSU millions in compliance costs by solving the 3-fold emissions problem generated by Nitrogen Dioxide, Sulfur Dioxide and Carbon Dioxide (SOX, NOX, CO2).”

– Neumann’s scrubber’s original intent was grande and its promise bold.  Imagine a 3-fold solution to environmental regulation compliance at a discount.  Unfortunately, something happened on the way to the Forum.

– I was told that while the idea worked in the lab, it failed in field testing.  Yes, it solved the SOX problem but it did not solve the other 2 problems.  Based on those tests Rankin (the father of the original conversation) recommended killing-the-baby.  Apparently, at the time there were 48 other existing technologies that solved the SOX problem with less capital cost.

Then politics entered the arena when Lionel Rivera pushed for a continuation of the project, expressing emotion over empiricism and reason, on the high notion that if the scrubbers worked, (even, if only at the SOX level), CSU should continue making an investment (venture capital funding), “go into business” with Neumann, sell the work-product, create jobs and experience a windfall.  And while that sounds just great, there is seems to be a problem.  .  . we don’t have any customers.  So the story morphed from “being a job generation machine” to being a “mere compliance mechanism.”

– At the last board meeting, Management’s recommendation was “1) move Neumann to Nixon and 2) begin a decommissioning study of Drake”.  We never heard their argument.  We need to.

The elephant in the living room is the perception that CSU is a treasure trove of delicious chocolate pie and it is a piece of that pie that everyone wants.  And to that end, we need to quit talking tactically and start talking strategically and make decisions (not in a vacuum), but in the context of the larger picture.  That context only comes with transparency, study, conversation and daring.  We should be discussing the value of the entire enterprise, its mission and strategic importance to the community.  The Neumann level decisions will take care of themselves in that proper context.

Right now, we receive about $30,000,000 per year to the general fund from CSU.  Like Goldilocks, there are those who think it should be more; there are those who think it should be less; there are those who think it is just right.  Heck, I’m not advocating a position except to say, let’s study it.  And, let’s use outside experts.

– And for the sake of argument, let’s envision a plan called “Reimagine Colorado Springs Utilities” where the utilities company is an integrated part of the city’s strategic vision and overall operation – not a stand-alone enterprise, and that as part of an integrated plan, we could find another $30,000,000 a year.  That second $30,000,000 (at 4% bonding cost) could yield $750,000,000 in serviceable debt that could fund our entire back-log of capital improvements in one fell-swoop!  This one startling, strategic alternative to business-as-usual could jump start our local economy, provide jobs and likely a significant job-multiplier (more jobs!)

– The Sustainable Funding Committee recommended we don’t sell because we’ve so overburdened the enterprise with debt, we’d never receive the full bouquet of benefits we now enjoy.  We owe it to the citizens to reevaluate this conversation at a high level and to see if there is a strategy that gets us out of debt.

I recall being heretical and anathema to council on the Memorial Hospital issue when I called for the administrative leave of the executives and the investigation of their board.  I recall being the lone voice a couple weeks ago when I said I would not support PPRTA II (which I now support because of the Mayor’s amendment to the agreement), and I’m likely a member of a very small wolf-pack on this.  But, that’s OK, because I’m not looking forward to the next election cycle, I’m looking forward to doing the right thing for the citizens.

– I’m asking that we follow the recommendation made by Management – that we hold-off the Neumann spend at Drake and push it to Nixon and complete a revaluation of Drake in the larger context.

– And, while I know this will likely fall on deaf ears, I suggest a special meeting of the council to discuss this as early as possible.

Respectfully Submitted,

Tim Leigh

City Councilman at Large