Friday, September 21, 2012

Neumann Systems — and its jobs — may be leaving Colorado Springs

Posted By on Fri, Sep 21, 2012 at 1:38 PM

Dave Neumann, owner of Neumann Systems Group, which developed the NeuStream emissions control technology being installed on coal-fired Martin Drake Power Plant, is exploring moving his business elsewhere.

Springs Utilities
  • Leigh: Doesn't like Neumann's contract.

In an exclusive interview with the Indy, Neumann says Councilman Tim Leigh's crusade against his company and his efforts to kill Colorado Springs Utilities' contract with Neumann Systems could lead to the loss of 60 jobs and a multimillion-dollar benefit of the city receiving a cut from the firm's gross sales.

"You can't have somebody out there that is just hammering away and damaging your company," Neumann says.

For the past four months, Leigh has called Neumann's technology "unproven" and "experimental," and challenged the roughly $120 million contract's fairness to ratepayers. Neumann says Leigh has told him the opposition to his technology has been mounted at the behest of Mayor Steve Bach. (We have contacted the mayor's office and will update if and when we receive a response.)

The latest tirade from Leigh came in his so-called "market report," in which he again challenges the technology has the most economical available.

"My colleagues agreed to undertake and study Drake issues at yesterday’s [Wednesday's] CSU Board meeting," writes Leigh, who didn't attend the meeting. "They did not go far enough. We must stop the Neumann spend at Drake now. If there were less costly other options available previously, we must find out if there still are. We don’t have the answers and until we do, we can’t continue to spend, spend, spend."

Springs Utilities officials have repeatedly said the Neumann technology is a third cheaper than other options available today, and energy chief Bruce McCormick reiterated that position today in an interview with the Indy.

"The damage that's been done to our company by Tim Leigh and the feedback we've gotten from prospective customers is unreal," Neumann says. "We're being very badly hurt by the mayor and Tim Leigh."

Although Neumann wrote a letter threatening Leigh with a legal action if he didn't stop disparaging his company with untruths, and said Leigh has "opened himself up to incredible liability," he says he believes it's bad policy to sue a City Councilman.

Neumann says he's met with officials in another state and has a meeting next week with a governor in another state. He also wants to meet with Colorado Gov. John Hickenlooper to explore possible locations in other parts of Colorado.

If Neumann leaves, he'll vacate 45,000 square feet of space on Elkton Drive and the possibility of ultimately occupying 150,000 square feet when his manufacturing operation gears up with orders.

Colorado Springs Utilities Drake Neumann
  • Neumann Systems Group's website
  • A cost comparison.

But if the city honors the contract and allows the technology to become functional on Drake, Neumann Systems will stay put, he says. Other utilities are eagerly awaiting a full build-out on Drake to be assure the technology works. The NeuStream has been shown by multiple tests and multiple examinations by experts to work in a test on 20 megawatts of power production. Because the technology is simply an add-on for larger loads, Neumann and Utilities are confident of its efficacy, he says.

"We have been treated great [by the city] up until the last three to four months," Neumann says. "I think we've constructed this win-win partnership with the city and we're delivering low cost emissions control to the city, cleaning the air. Up until that point when the mayor and Leigh decided to take down the Drake plant and us along with it, it's been great. We've had a tremendous opportunity here. There are great people on Council. I think very highly of the vast majority of the people on City Council."

He says Leigh's commentary has led potential customers to question the system. If the city succeeds in driving away his business, it would miss out on a cut of gross sales in a firm that holds 36 patents in nine countries and is working with international distributors.

"There's an awful lot in the works here," he says. "It's a waste of our effort if we're going to be in a community that has a few people who are trying to run us out of town."

Leigh says via email: "Nothing could be further from the truth! I'm an entrepreneur and I love other entrepreneurs. The norm for a business like Mr Neumann's is to let the free market fund his experiments, not unaware ratepayers who can't afford venture capital style risks. If Neumann's stuff proves to be as good as he says, I will be labeled the town clown for questioning it and him, and (rightfully so). That he lashes out in this manner continues to fan my flame of suspicion."

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