A study of retiring the 87-year-old downtown Martin Drake Power Plant will go forward, the City Council, sitting as the Colorado Springs Utilities Board, decided this afternoon.
The study will include a technical review, at an estimated consulting cost of $500,000. The review will investigate replacing Drake's 254-megawatt capacity with a new plant, purchased power or some other method. It also will look at fuel prices, regulatory scenarios and how various solutions will impact rates.
A separate economic development analysis, for which no consulting cost estimate has been made, will delve into opportunities for business and residential development, job creation and retention, and community development.
Lastly, a consultant will be hired to manage the public process, which will include public meetings, customer research and input from "stakeholders" on the technical and economic development analyses.
As for the slow roll of the Neumann Systems Group technology, which is on the brink of having equipment installed on Drake, the Utilities Board pushed off adding the scrubbers to Drake, pending a cost analysis of shifting the project to Nixon Power Plant south of Colorado Springs.
"This is the expected outcome," Rob Fredell with Neumann Systems Group said after the vote. "We would have preferred all the information be available today" so the board could have decided to move ahead on Nixon or not.
Fredell said major components of the system were delivered to Drake yesterday and today, but that they will be protected from weather and vandalism as they sit idle pending the board's decision, expected in July or August.
The dilemma concerning Neumann centers on whether to go ahead and equip Drake with pollution control equipment developed by Neumann or hold off until the Drake study is done. If the city bags the Drake project, ratepayers lose roughly $40 million already invested in the project. If it goes ahead, the plant might be decommissioned within 10 years, meaning the $112 million estimated cost would be at least partially wasted. If Drake is scrapped, the city could be faced with exorbitant costs for replacement power — either building a new plant or being at the mercy of those selling power. The city also could face a significant environmental clean-up of a site that was a trash dump, Councilor Lisa Czeladtko said, before Drake was built there in 1925.
"It's not going to be cheap, not matter what we do," Councilor Bernie Herpin said.
Council President Scott Hente seemed to want to move ahead with the Neumann technology, fearing the city and Neumann otherwise would pass up a golden chance to pioneer emissions technology and profit handsomely for it.
"Are we going to miss the window of opportunity in being able to market to other utilities?" Hente said. "If we delay this for any significant period of time, do we run out of that window of opportunity?"
At least 50 power producers are watching the Drake project as it becomes the inaugural power plant to host Neumann's emissions removal method that is both cheaper than competitors and takes up less space. But as time goes by and power producers eye coming EPA regulations, will they be willing to wait for the final test of Neumann's gadget?
This is important to the city, because its contract with Neumann entitles the city to 3 percent of all sales in the first 10 years of production of the technology, which costs hundreds of millions, depending on the size and location of power plants. It also gives the city the chance to boost jobs, because Neumann's technology, if it takes off, could bring hundreds of jobs here. Moreover, his company already is using some two-dozen local companies to manufacture and develop the technology. Without the Drake test, his venture could suffer badly.
While Councilors Tim Leigh and Angela Dougan tried to paint Neumann's invention as untested, unproven and risky, Utilities' energy chief Bruce McCormick said the city and outside experts have validated that it works. And Dave Neumann, a physicist who started the Neumann company and has worked on lasers in the Air Force, told the Utilities Board that there's no chance it won't work at full scale (it already has been tested successfully at one-seventh scale), because if one unit works, all will work. Just like solar cells, he said, which are added to make for a larger generating facility, his technology relies on the same premise of simply adding units to scale up to a larger facility.
The Drake study is expected late this year.
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