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Archive for the 'David Neumann' Tag

Inventor accuses city attorney of ‘extreme prejudice’

January 6th, 2013, 9:40 pm by

City Attorney Chris Melcher

David Neumann, who invented the scrubber technology that is being installed at the Martin Drake Power Plant downtown, is accusing City Attorney Chris Melcher of “extreme prejudice” toward his company and Colorado Springs Utilities.

In a strongly worded email sent Sunday night to Melcher and some City Council members, Neumann also says Melcher may be trying to stonewall an ethics complaint that Neumann filed against City Councilman Tim Leigh.

The Gazette received a copy of Neumann’s email late Sunday. About 9 p.m., the newspaper sent an email to Melcher seeking comment. Chief Communications Officer Cindy Aubrey was cc’d in the email.

This blog post will be updated as soon as Melcher responds.

A private meeting in Mayor Steve Bach’s office Friday apparently prompted Neumann’s email to Melcher.

But the meeting wasn’t about Neumann’s scrubbers.

The meeting was about the work of the Stormwater Task Force.

Jason Hann, a task force member who was not in the meeting but heard about what happened afterward from someone who was there, described the meeting like this:

“Melcher stated that NO regional cooperation would take place and if there were collaborative efforts for projects the City would be at the helm. Bach commanded that he knew there were several agendas at the table and that he was going to tell us what our agenda is. Bach stated there will be NO tax recommendation and that while his administration existed, CSU was going to be responsible for paying for stormwater. That CSU needed to “scrub” their budget again (despite the City not being able to execute a zero-based budget themselves). That the Neumann cleaner technology should be removed and that would provide millions right away and for years to come,” Hann said Sunday morning on Facebook.

Robin Roberts, who was in the room, corroborated Hann’s account.

“I was on this committee and in this meeting on Friday,” Roberts said on a Facebook thread. “The way Jason is reporting it is accurate, although I do remember that the suggestion of Utilities taking over the storm water function was just a suggestion, an option thrown out there.”

Roberts said she will never volunteer for the city.

“It will be a cold day in hell before I volunteer my time on a committee for this city again,” she said.

Here is the full text of the email that Neumann sent to Melcher:

Mr. Melcher:

You are being quoted by a number of sources as expressing extreme prejudice toward our company and CSU as part of a Storm Water meeting last Friday which was presided over by the Mayor and held in the Mayor’s office.

Additionally, we are in receipt of a letter from you to two council members which instead of providing them with legal guidance on how to determine conflict of interest you single out the employees of our company and employees of CSU as being the definition of a conflict of interest.

Further evidence of your extreme bias toward our company and CSU is shown in your negotiating a deal with the Sierra Club that involved damaging our company and a CSU project approved and budgeted for by the CSU Board. You attempted to cut a deal with a radical environmental group that could have resulted in a $400 million loss in ratepayer assets and a 30-50% increase in electric rates and may have prevented the Drake plant from receiving required emissions controls.

Additionally, we expect that any meeting discussing the merits of our contract or our company’s past, present or future relationship with CSU will be discussed openly with an opportunity for public comment.  Furthermore, we demand that you release to the public the records of past private meetings dealing with our contract with CSU so that the public may determine whether your conduct is appropriate to your position.

Finally, based on information from two separate Council Members, your alignment with Councilmember Leigh has become clear and it appears that you are attempting to stonewall or deflect the Ethics investigation of Councilmember Leigh.

We can only wonder why you have not taken action directly against Councilmember Leigh when you have explicit examples of his providing false information to the public and the Board. It is obvious that you have examined our contract with CSU in detail. Therefore, when Councilmember Leigh says the contract title says it is for “Experimental” equipment you know that is false. When he says the CEO did not sign it you know that is false.  When he says there are no specs, you know there are over ten pages of specifications. We are prepared to present over twenty separate counts of ethical and legal violations by Councilmember Leigh should we be given the chance.

Request that you explain to the public how your actions above and other related actions you have done as required by the Mayor are consistent with the appropriate conduct of the City Attorney. Perhaps you can also explain the responsibilities any lawyer has to avoid conflicts of interest. How is it possible for you to do the will of your boss the Mayor under threat of termination, while simultaneously representing the best interests of the City, the Council and Colorado Springs Utilities when their interests are in conflict?

David K. Neumann

 

Posted in: City Council • City employees • Meetings • People • Politics • Transparency • Utilities • • • • • • • | 16 Comments »

City schedules closed-door session to discuss no-panhandling zone lawsuit, ethics complaints

January 4th, 2013, 11:24 am by

The City Council is scheduled to meet behind closed doors Monday to discuss a lawsuit over a no-solicitation zone downtown.

Monday’s informal agenda included a closed executive session for “legal advice and consultation” with City Attorney Chris Melcher regarding the status of a complaint filed against the city by the ACLU, which says the zone violates the First Amendment.

After the closed session, the council is scheduled to reconvene in open session and have a “general discussion” about the status of the case, according to the agenda.

The lawsuit over the no-panhandling zone isn’t the only item scheduled to be discussed in closed legal session.

The council also is scheduled to receive “legal advice and consultation … regarding the processes and procedures for ethics allegations against councilmembers.”

That item may be tied to an ethics complaint filed against City Councilman Tim Leigh by David Neumann, who claims Leigh “has committed numerous wrongful acts potentially in violation of his  fiduciary and other duties as a member of the Board of Directors of Utilities.”

Neumann has a $73.5 million contract with Colorado Springs Utilities for scrubbers at the Martin Drake Power Plant downtown. The contract and the scrubbers themselves are the subject of intense debate among city officials.

 

Posted in: City Council • Meetings • Transparency • Utilities • • • • • • • | 1 Comment »

Neumann scrubbers nominated for Edison Award

December 19th, 2012, 4:35 pm by

David Neumann

A homegrown technology that scrubs sulfur dioxide from coal-fired power plants has been nominated for an award that honors innovation and innovators.

“NSG is honored to be considered for an Edison Award,” David Neumann, CEO of Neumann Systems Group, Inc., said in an email Wednesday.

“It is hard to comprehend being mentioned in the same breath as Thomas Edison and great technologies like the iPAD and Ford Focus Electric,” he added.

Neumann said the nomination would not have been possible “without the extraordinary dedication” of his team and “the work that has been and is being done under our public-private partnership with Colorado Springs Utilities.”

The city-owned utility had been looking at buying conventional emissions control technology for its power plants when it met Neumann. After several successful tests of Neumann’s technology at the Martin Drake Power Plant downtown, Utilities decided to invest in the NeuStream scrubbers rather than purchase existing technology.

Bruce McCormick, Utilities’ chief energy services officer, said in a recent interview that Utilities “certainly” took risk into consideration.

“But when you’re convinced that the cost is much lower and the performance is much better, those are the things that tell you, ‘Hey, it’s time to take that risk,’ he said.

The utility also factored in “the benefits to our local community around economic development,” McCormick said, referring to hopes that the technology would prosper.

The technology has faced increased scrutiny over the past year – and future funding from ratepayers is still in question – as city officials debate the future of the Drake power plant. Most recently, questions have surfaced about why Utilities awarded Neumann a sole-source contract.

In announcing the Edison Award nomination, Neumann said his technology has the “potential for revolutionary impact in a wide-range of product areas important to the industrial and economic well-being of the United States and the rest of the world.”

Neumann said the nomination came about from a recommendation from an “unnamed member” of the Edison Awards Steering Committee. Finalists will be announced in February.

Posted in: People • Utilities • • • • • | 11 Comments »

Inventor seeks ethics investigation of councilman

December 13th, 2012, 3:19 pm by

Tim Leigh

The businessman who invented the scrubber technology being installed at the Martin Drake Power Plant downtown is requesting an ethics investigation into City Councilman Tim Leigh.

And David Neumann seems to be hinting that Mayor Steve Bach needs to be investigated, too.

The request for an ethics investigation was filed with City Attorney Chris Melcher on Monday.

Here it is part of Neumann’s letter to Melcher:

“My company, Neumann Systems Group, Inc. (NSG), is a Colorado Springs Utilities (Utilities) ratepayer and a vendor of Utilities. I, David K. Neumann, am CEO and President of NSG. In accordance with the City Charter, NSG requests an ethics investigation of the actions of Councilmember Leigh relative to Utilities, its Officers and Directors, its citizen-owners, its ratepayers, and its vendors. We believe that, (yes, there is a comma here) Councilmember Leigh has conducted a vendetta against Utilities, its officers and Directors and certain vendors of Utilities and has committted numerous wrongful acts potentially in violation of his  fiduciary and other duties as a member of the Board of Directors of Utilities.”

And here is where it gets interesting because Neumann says other “senior elected” officials may be involved, too, though he doesn’t name any names.

“We are also concerned that other senior elected and appointed officials of the City may be involved as well at least in terms of potential appearances of impropriety and potential conflicts of interest,” Neumann wrote in the letter to Melcher.

Today, Neumann contacted Melcher again.

Here is a copy of that correspondence:

Mr. Melcher:

My apologies. I was told that for the second time my request for an Ethics Investigation of Councilmember/Boardmember Tim Leigh did not have the proper terminology for you to consider it valid and to act on it in your proper capacity as City Attorney. Both times you have failed to show me the courtesy of a response which informs me that you are rejecting these requests and the reasons for your rejection. To be clear, I and my company NSG request an investigation of Councilmember/Boardmember Tim Leigh by the City’s Independent Ethics Committee for the reasons stated in the previous two letters/emails that were sent to you.

If this is still not clear enough, then please provide me with the sample format you require for submission of a request. There is none available that I know of and no specific wording required as part of the City Charter.

I look forward to the courtesy of a response from you or your supervisor.

Thanks,

Dave

David K. Neumann, CEO

Neumann Systems Group, Inc.

 

Posted in: City Council • People • Politics • • • • | 17 Comments »

Inventor: Deal puts technology at Drake in jeopardy

December 13th, 2012, 11:50 am by

David Neumann

The secret agreement between the city of Colorado Springs and the Sierra Club may put a controversial emissions control technology being installed at the downtown power plant in jeopardy.

“My understanding is that recent secret negotiations with the Sierra Club conducted by the City Attorney have resulted in an agreement which partially or wholly suspends our contract,” businessman David Neumann, who invented the sulfur dioxide scrubbers, said in an email to the Colorado Springs Utilities Board.

” I appeal to you to have a full and open discussion with the community before you proceed to endorse the dealings of the City Attorney.  These dealings by the City Attorney may appear to many of the Colorado Springs Utilities’ citizen-owners and ratepayers as truly egregious acts,” he wrote.

Here is the full text of Neumann’s email:

Dear Colorado Springs Utilities Boardmember:

As you know NSG with its 55 employees has a contract to provide emissions control capability for the Martin Drake powerplant in compliance with EPA requirements. Already $60 million of rate payer money has been committed or spent.  NSG stands ready to continue performance of that contract and provide the City with one of the cleanest coal plants in the country.

My understanding is that recent secret negotiations with the Sierra Club conducted by the City Attorney have resulted in an agreement which partially or wholly suspends our contract.   I appeal to you to have a full and open discussion with the community before you proceed to endorse the dealings of the City Attorney.  These dealings by the City Attorney may appear to many of the Colorado Springs Utilities’ citizen-owners and ratepayers as truly egregious acts.

While it is clearly not my place to judge the City Attorney’s actions, I do believe that NSG, as a vendor of Colorado Springs Utilities, has a right to expect full and open discussions, with substantial Community input, before actions are taken that may adversely affect assets of Colorado Springs Utilities, the Community and NSG.

Thanks for considering this,

 

David K. Neumann, CEO

Neumann Systems Group, Inc.

Posted in: Boards and Commissions • City Council • Lawsuit • Meetings • Transparency • • • | 5 Comments »

Leigh: Utilities forms group ‘to defeat the mayor’

November 19th, 2012, 10:29 am by

Utilities CEO Jerry Forte

Colorado Springs Utilities has created a covert group to silence any questions about its management, including questions from Mayor Steve Bach, according to City Councilman Tim Leigh.

But the city-owned utility has a different explanation about the group and its mission.

“The effort being referred to is a team of existing employees who, as part of their normal responsibilities, are focused on ensuring the community and our customers are informed about current utilities discussions that affect them,” Utilities spokeswoman Nikki Richardson said in an email.

“We are ramping up our outreach efforts to meet an increased demand for information. This team works to provide proactive, reponsive (sic) communication, which is not outside what we normally do,” she said.

Leigh said the team is a special working group “to defeat questions and questioners who voice alternative views to CSU’s management.”

“I have been told that such a group exists and that their function is to defeat the mayor (and anyone else who speaks out) against CSU policy and that this working group is designed especially in context of the coming city council election,” Leigh wrote in his electronic newsletter.

“While I don’t mind political opposition, I do mind it, if it is being paid for with ratepayer dollars,” he wrote.

The allegation is likely to be flushed out today at the Utilities Board meeting, which starts at 1 p.m. The meeting is on the fifth floor in the south tower of the Plaza of the Rockies.

Here is the full, unedited text of Leigh’s newsletter:

I have been considering the CSU budget over the past few weeks and at this time, I don’t plan to support the budget because, as presented it’s a mere marketing piece designed for slick obfuscation.  Furthermore, as part of the conversational process, I plan to ask for separate votes (bifurcation) on the budget detail relating to public relations, advertising, charitable giving and the Neumann spend.

I believe the average ratepayer would like to know what purpose robust public relation, advertising and charitable giving programs serve with respect to their municipally-owned monopoly.  Therefore, I think it would be instructive for leadership to deliver a line-by-line itemization of the rationale for each program and its’ spend, delineating specifically the expected (and actual) rate-of-return for each.

Furthermore, I’d like to inspect the Neumann spend more thoroughly.  I’d like to see a line-by-line itemization of that spend, including following the distribution of money from CSU to the vendor, account-by-account, from the project’s inception, by date, amount and purpose and, I’d like to see the cost and who paid for the validation of the Neumann process.  (An arm’s length forensic audit would be acceptable.)

Does Neumann’s system work?  I’ve been told NO.  Others, including CSU management say yes.  Because of that uncertainty, I’d like to see the 3rd party verification.

– Does 3rd party verification exist?

– Who performed the research?

– Was the research done to validate a predetermined conclusion?

If management is so certain that the Neumann system works, are they willing to individually stand-by the process, including accepting responsibility if it fails to perform to expectation?  We’re already aware of one failure in the Neumann grand plan – there are no customers willing to buy the system providing the promised pie-in-the-sky income.  (There are no fish under the ice!)

My position on the Neumann spend has been unwavering.  We need to stop-the-spend [now] until a full inspection the CSU system is completed and until we’ve finally determined Drake’s fate.

We know we have existing environmental compliance issues costing millions beyond the Neumann scrubber.  We also know of threatened law suits from radical environmental groups and now with Obama’s reelection we can legitimately surmise both threats will amplify.  What we don’t know is our long-term ability to pay for these increasing external threats.  I have asked on several occasions about our aggregate borrowing power and the assumptions that were used in determining that borrowing power.  [Consider buying a house.  You like the house.  You think you can afford the house.

You apply for the loan and (in spite of your good intention) are turned down because your current payments exceed your ability (not your willingness) to borrow the money needed to buy the house.]  While I don’t know that that is the case in our case, I’d like to have a clear answer with data supporting the conclusion.   I would like to know what revenue streams were used to determine our long-term borrowing power.  [We’re not building-out Banning Lewis; our population growth is flat; we’re going to lose income when the military installations get to “net zero”.]  Show me the potatoes.

Lastly, and this is very troublesome, I’d like to know if there exists’ a special “working group” within the CSU system designed as to defeat questions and questioners who voice alternative views to CSU’s management?  I have been told that such a group exists and that their function is to defeat the Mayor (and anyone else {little Timmy Leigh from Grand Forks, North Dakota comes to mind}) who speak-out against CSU policy and that this working group is designed especially in context of the coming city council election.  While I don’t mind political opposition, I do mind it, if it is being paid for with ratepayer dollars.

Posted in: Boards and Commissions • City Administration • City Council • City employees • Elections • Meetings • Politics • Transit • • • • | 12 Comments »

Utilities pitches scrubbers but gets no responses

October 29th, 2012, 10:01 am by

David Neumann, founder and CEO of Neumann Systems Group, poses with boxes that are a part of the system the company manufactures to scrub sulphur out of exhaust gas. Photo by Mark Reis, The Gazette

Colorado Springs Utilities is trying to drum up business for the local company that invented sulfur dioxide scrubbers that are now at the center of a community debate about the future of the Martin Drake Power Plant downtown.

But so far, no one has called back.

In September, Chief Energy Services Officer Bruce McCormick sent a letter to 10 utilities with coal-fired power plants in Nebraska, Oklahoma, Wisconsin, Kansas, Missouri, Utah and Iowa touting Neumann Systems Group’s wet flue gas desulfurization system.

“We chose NeuStream®-S scrubbers because we thought NSG represented the best technology and best value for our ratepayers. We still do,” McCormick wrote in the one-page letter.

“Based on our success to date, we are happy to have partnered with NSG in this effort, and recommend them highly as a smart, honest, responsive, and cooperative partner for your flue gas desulfurization needs,” he wrote.

The letter was obtained by The Gazette under an open-records request.

The purpose of the letter was to “generate awareness and interest in the NeuStream solution among utilities with similar emissions control needs,” Utilities spokesman Dave Grossman said in an email.

“The effort supports the 3 percent sales assistance fee portion of the agreement with Neumann Systems Group,” he added.

Under the agreement with Nuemann, Colorado Springs Utilities stands to make 3 percent on the company’s gross sales of its scrubbers for 10 years.

McCormick’s letter apparently didn’t generate much interest.

“Bruce has not yet been contacted by any of the utilities,” Grossman said.

Here is the full text of the letter and its recipients:

August ___, 2012

 

<<NAME>>

<<TITLE, UTILITY COMPANY>>

<<ADDRESS1>>

<<ADDRESS2>>

RE:       Support for Neumann Systems Group’s wet Flue Gas Desulfurization

Dear <<Utility CEO>>,

You may know that Colorado Springs Utilities is more than 60% complete on a $73.5M contract to design and construct SO2 scrubbers on our Martin Drake power plant located near downtown Colorado Springs.  We have contracted Neumann Systems Group, Inc. (NSG) to design and build two full-scale NeuStream®-S scrubbers (combined 227 MW).  Colorado Springs Utilities has invested approximately $50 million in research and development services with NSG for the design, building, testing, and operation of separate, escalating 2 MW and 20 MW pilot plants to test and develop NSG NeuStream® multi-pollutant control technology.  Scrubber construction is due to start later this year for a fully operational system in 2014.

I am pleased with the outstanding results NSG has obtained across the spectrum of air pollutants, from SO2 to CO2 capture, in a series of relatively low-cost retrofit systems with small “footprints.”   Our internal testing of SO2 capture, verified by EPRI, shows the NeuStream®-S scrubbers:

– Capture 97% of SO2 from our PRB coal-fired power plants,

– Are extremely reliable, exceeding our two-year continuous operation requirement,

– Are capable of handling either high- or low-sulfur coal,

– Use about one-fourth to one-half as much water as competing desulfurization systems,

– Use about one-half as much parasitic power as competing systems (~1%),

– Cost about half the CapEx and OpEx of wet FGD (limestone forced oxidation) and Dry FGD (lime spray dryer) on the market, and

– Require about one-tenth the absorber volume of competing desulfurization systems.

We chose NeuStream®-S scrubbers because we thought NSG represented the best technology and best value for our ratepayers.  We still do.   Based on our success to date, we are happy to have partnered with NSG in this effort, and recommend them highly as a smart, honest, responsive, and cooperative partner for your flue gas desulfurization needs.

Sincerely,

Bruce McCormick, P.E.

Chief Energy Services Officer

Posted in: People • Utilities • • • • • • | 7 Comments »

Councilman: Should Utilities CEO hit the road?

September 17th, 2012, 8:10 am by

Jerry Forte

Has the time come to replace Colorado Springs Utilities CEO Jerry Forte?

That’s the question City Councilman Tim Leigh ponders today in his electronic newsletter.

“I’m still fuming over the Neumann contract with the Colorado Springs Utilities.  I can’t figure out who thought this was a good deal,” Leigh wrote.

“Who should be held to account? Is it time to consider changes in leadership?” Leigh asked.

Here is the full text of Leigh’s newsletter:

I’m still fuming over the Neumann contract with the Colorado Springs Utilities.  I can’t figure out who thought this was a good deal.

The underlying rationale for the decision is easy to understand.  [Pay less-get more.]  The ultimate business points aren’t as easily understood.

Nuemann was going to provide a robust, full-bodied technology and equipment that would clean Drake’s coal-fired power plant emissions, removing SOx, NOx, particulates and CO2 at ½ the cost of other, (readily available), solutions and we were going to receive sale commissions when he sold the elixir.  Now he’s merely brewing Neumann-Lite, a solution for SOx only with significantly less cost savings; and there are no customers.

From Neumann’s perspective – this is a sweet deal.  He gets all his costs covered plus 10%.  And there is NO cap on costs and NO date-certain for installation.  And, if we use his technology at the Nixon Power Plant, we pay him more!  His contract becomes cost plus 15%!  How wonderful it must be, to be a government contractor.  (Remember fishing when you were young?  It was always a good time – except for the fish.)

I’m not faulting Neumann for being clever enough to pull-this-off.  I’m faulting CSU’s system-of-governance and those board members specifically who were driving it when the contract was contrived.  There was no legitimate oversight then, nor is there yet.

Realize – Neumann had no buyable product – nor does he.  [He does not yet possess a proven-scalable product!]  And shame on us, because his contract clearly says “Statement of Work for Experimental Emission Control Systems”.  Furthermore, even if Neumann had a proven technology, I’ve been told he didn’t have sufficient funding available to build or install without CSU.  We’ve given Neumann a free-pass.  And if his stuff doesn’t work, we’re the schlemiel.

Legitimate questions are:

  • Did the CEO and his team understand the deal?
    • Did they read the contract?
    • Can they justify the speculative risk to the ratepayers and the outrageous profit to the vendor?
    • Did the empanelled board members at the time understand the deal?
      • Did they read the contract?
      • Can they justify the speculative risk to the ratepayers and the outrageous profit to the vendor?
      • Why was a contract of this magnitude signed by a procurement manager and not the CEO?
        • Are there other, similar decisions made by these same folks that need to be re-evaluated?
        • Are there other, similar contracts that need to be re-evaluated?
  • Interesting Rhetorical Questions:
    • If a leader believes Neumann-style contracts are good for the consumer, is he miscast in his role?
      • Should his overall skill-set be questioned?
      • Should his business-decision-making ability be questioned?
  • What other decisions have been made by CSU leadership, which are sheltered by the shadows of an errant bureaucratic process and that are deleterious to the citizens, need to be revisited?
    • How do we shed light on those decisions and contracts?
  • Who should be held to account?
    • Is it time to consider changes in leadership?

The Neumann spend at Drake ($121,000,000) will cause about a 10% electric-cost rate-increase to the average consumer by 2015.  And CSU is facing at a similar spend at Nixon’s coal plant by 2016 (another 10% rate increase); and a similar spend for Mercury Emission Monitors across the system by 2017 (another 10% rate increase).   [10% + 10% + 10% = 30% electric cost rate increase by 2017.] It’s time to look for alternative solutions!  .  .  .  and there are alternatives!

  • BTW – For commercial property owners, think of these rate increases this way:
    • This is taxation without representation – EPA mandates have no explicit authority in law.
    • For every dollar increase in operating costs, your building loses about $10 in value.
      • And for the tax collectors amongst us – realize that in the aggregate, every $10 decrease in property value reduces tax collection substantially.
  • This is how we’re all connected.

I remember questioning the leadership and board at Memorial Hospital.  (You may recall; I called for the CEO’s firing.)  Of course, I was quickly thrown off that bus by many of my contemporaries for making that request.  That was a brutal time when I learned you need thick-skin to play this game.   Eventually, the MHS bus ran into a cathartic ditch emerging as the new CSU/MHS healthy-heath system.   I’m at the same point with CSU with a special indictment of the Carver Model and the lack of oversight driven therefrom.

The CSU bus has left the road.  .  .  That it has, is manifest by dissatisfied employee groups, a divided board and a community crying for greater accountability.  It’s time for serious change at CSU and this Neumann situation proves the point.

Posted in: Boards and Commissions • City Council • City employees • Politics • Utilities • • • • • • | 18 Comments »

Inventor calls Leigh’s comments offensive, inaccurate

July 30th, 2012, 10:06 am by

City Councilman Tim Leigh sure knows how to stir up a debate.

The local businessman who invented a technology to reduce emissions at coal-fired power plants is the latest to weigh in on statements made by Leigh regarding the technology and the decision to move forward with plans to install it at the Martin Drake Power Plant downtown.

“I am responding to Councilmember Tim Leigh’s latest comments indicating that our system failed testing and is the most expensive of “48” SOx (desulfurization options) for power plants,” David Neumann, CEO of Neumann Systems Group, said in an email to City Council members Monday morning.

“Further claims are that Mr. Drew Rankin recommended ‘killing the baby’ and that Mayor Rivera inappropriately saved the project for political reasons and over the objections of Colorado Springs Utilities (CSU) personnel. Mr. Leigh’s comments are highly offensive (including especially the use of imagery such as ‘killing the baby’) and from what I know about the circumstances highly inaccurate.  Let him name his source(s),” Neumann wrote.

Here is the full, unedited text of Neumann’s email to council:

Dear Councilmember:

I am responding to Councilmember Tim Leigh’s latest comments indicating that our system failed testing and is the most expensive of “48” SOx (desulfurization options) for power plants.  Further claims are that Mr. Drew Rankin recommended “killing the baby” and that Mayor Rivera inappropriately saved the project for political reasons and over the objections of Colorado Springs Utilities (CSU) personnel. Mr. Leigh’s comments are highly offensive (including especially the use of imagery such as “killing the baby”) and from what I know about the circumstances highly inaccurate.  Let him name his source(s).

As many of you have seen, our technology went through three phases of rigorous development funded by CSU and prior to being chosen for commercial implementation at Martin Drake and Ray Nixon. Comparative cost and performance studies were performed of NeuStream® vs Best Available Control Technology (BACT).  The regulatory environment in existence during Phase 1 of the NeuStream® project (completed in early 2008) and Phase 2 (completed in early 2009) were pointing to much more stringent regulations for SOx and NOx, and for the first time new regulations on CO2.  Note also that both Martin Drake and Ray Nixon at that time had and currently have NOx controls that meet Air Quality requirements. In that vein we did preliminary (and successful) testing on removal of all three emissions. That data is available for you to review. During Phase 2 of the NeuStream® project, it became apparent that in the near term no additional NOx requirements and no new CO2 requirements were going to be imposed on large coal burning sources like Martin Drake and Ray Nixon.  As I understand it, it was on the basis of a documented need for SOx only emissions control capability, that we were then contracted to complete a Phase 3, 20 MW pilot plant for SOx only.

As we have shown many of you, including Councilmember Tim Leigh, EPRI in their cost study done by the URS Washington Group showed our system to be 30%-40% lower cost than any other competing technology. Councilmember Leigh has seen the cost information as well as the results of the testing on our system twice. I spent 3-hours with him in June 2011 going over our information in detail and touring Drake with him. I have documented records of precisely what he saw in June 2011. He then saw the same information again with additional detail when he recently brought in his and the Mayor’s two experts.

With regard to Mayor Rivera’s involvement in the review of our technology, my only exposure was through Dr. Duncan Stewart who Mayor Rivera asked to do an independent assessment of our technology and report to the Board.  I do not recall seeing a copy of the report. However, my understanding was that it was positive about moving forward and that the Board has copies of that assessment.  I spoke with Dr. Stewart over the weekend and he is prepared to comment to you about the report.  Mayor Rivera spoke with me directly a couple of times about supporting his work as Vice Chairman of the Energy Committee for the National Council of Mayors and definitely was enthusiastic about supporting the technology–especially after Dr. Stewart’s review.

Additionally, with regard to what Mr. Drew Rankin said or didn’t say, I can only refer you to Mr. Tom Black, P.E., now at Fountain Electric. Mr. Black at the time was Chief Energy Services Officer and Drew Rankin’s boss.  Mr. Black is also prepared to speak with you and send you information about what was happening in that time frame.  I met frequently with both of them about the status throughout the program and I don’t recall ever hearing any of the comments that were attributed to them by Councilmember Leigh’s unnamed source.  Our contract with CSU at the time was a Professional Services contract with many smaller short term task orders that focused our work on meeting the emissions control requirements being imposed by the State and Region 8 EPA. The State CDPHE people visited and reviewed our project several times. If something happened “on the way to the Forum” that can only be the changing State and EPA air quality requirements which caused us to narrow our project to meet those specific requirements.

Since Phase II of our project ended with CSU we have garnered other sources of funding which have allowed us to pilot and test at another Utility an optimized NOx, SOx, Hg, and particulate removal system as well as a CO2 system. All of these units use our unique scrubbing technology and all show the same promise of being, by far, the low cost provider in the marketplace.

Thanks for Listening,

Dave

David K. Neumann, CEO

Neumann Systems Group, Inc.

Posted in: Boards and Commissions • City Council • Politics • Utilities • • • • • • | 5 Comments »