Nearly four years ago, David Neumann approached Colorado Springs Utilities with an idea for cleaning up emissions from its coal-fired power plants. But he needed a power plant for testing.
Utilities offered the 254-megawatt Martin Drake Power Plant downtown, and testing began — initially, for .13 of 1 megawatt of power. Over time, tests involved more megawatts, and at each step, Utilities officials would say the technology — trademarked NeuStream — outperformed even the most optimistic hopes.
Now, the city and Neumann Systems Group have executed a contract to officially install the technology at Drake, to remove sulfur dioxide from emissions and help Utilities comply with new regional haze air pollution requirements.
"It's really been a long haul to get to this point," Utilities energy chief Bruce McCormick says.
The technology will cost $73.5 million, and installation — to be complete in 2014 — will add another $39.5 million. Construction projects such as this are funded by ratepayers, and Utilities hasn't said how much rates will rise to pay for this one. But the total cost is substantially less than the estimated $150-plus million that other vendors of similar technologies would charge, McCormick says.
Neumann's technology occupies less space than that of competitors, making it more desirable, especially for Drake, which doesn't have a lot of room to spare.
The city also is negotiating a separate deal that would pay the city a greater share of Neumann's sales, since the city was the guinea pig. How much hasn't been released, but a current agreement calls for the city to get 1 percent. "This one actually gives more consideration to Utilities and our customers, so it's going to improve the return we get," McCormick says of the new deal. He didn't say when the contract would be finalized.
So far, Neumann doesn't have any other orders, says company spokesperson Suzanne Kladder, but is "talking to several other utilities."
Ray D. Nixon Power Plant south of Colorado Springs also will be equipped with emissions control technology, but probably not until 2016 or beyond, well after the Environmental Protection Agency's summer 2012 release of control standards, says Utilities energy supply general manager George Luke. He and Kladder say they're confident the technology installed at Drake will meet EPA regulations.
Neumann, a former Air Force Academy researcher, told the Indy in a rare interview Tuesday, "We're extremely thrilled with the opportunity we are getting from CSU to go full-scale with this technology."
He says his company has received three U.S. patents, and has nine more pending in the U.S. and four pending in each of nine other countries, including Europe, China and India. Some patents deal with nitrogen and carbon dioxide emissions control as well as sulfur dioxide. Carbon dioxide has been labeled a chief cause of climate change.
Neumann says Colorado Gov. John Hickenlooper has taken a personal interest in the technology, and Neumann credited Council President Scott Hente, President Pro Tem Jan Martin and former Mayor Lionel Rivera for their consistent support.
McCormick says the installation, operations and maintenance of the equipment at Drake will require hiring 15 additional employees next year. Kladder says she's not sure how many employees Neumann will need to hire. Work is to begin this fall.
McCormick says the deal gives the city a way to use coal "in an environmentally responsible way." Coal comprises roughly 70 percent of the city's resource mix, mostly because it's cheaper than other fuels.
"We're happy the technology will be installed at lower cost and will create local jobs," he says. "For all those reasons, it's a good thing."