Clearing the air 

Drake coal plant prepares for pollution control equipment installation

Step onto the Martin Drake Power Plant compound south of downtown, and it'll seem far-fetched that Colorado Springs Utilities could shut down the coal-burning site anytime soon.

Cranes are hoisting massive amounts of iron and steel into tight places, between the cooling towers and the turbine house. The pieces form technology that will scrub sulfur dioxide (SO2) from plant emissions before a late-2017 Environmental Protection Agency deadline.

"It's big," says Dan Higgins, Utilities' interim general manager of power supply. "It's like building another plant."

In fact, 131-megawatt Unit 7 was shut down Friday and allowed to cool over the weekend in preparation for tying in the new technology over the next 45 days. In the fall, performance tests begin.

The same will follow next year for 77-megawatt Unit 6. The third unit, No. 5, a 46-megawatt turbine that caught fire last May but went back online in recent days, won't rely on the new technology, Higgins says; it will be powered with a blend of coal and natural gas to keep SO2 below EPA limits, possible due to its small size.

The technology, developed by locally owned Neumann Systems Group, represents at least seven years of planning, research and development and an investment by Utilities of up to $170 million upon completion. That's about $42 million less than the estimated $212 million cost of a traditional system, Higgins says, but about $60 million more than a 2011 "business case" estimate.

That business-case estimate, notes Higgins, didn't include an outside engineering firm overseeing the project for $11 million; site improvements of $10 million; materials and construction bids that came in higher than originally estimated; and the cost of Utilities personnel time.

The $170 million figure also includes a higher cost for the Neumann technology itself — $93 million, versus $73.5 million in 2011. That increase, Higgins says, is due to Utilities' requests for more time and design changes, and rising costs of materials.

An oft-cited $20 million figure for the Neumann technology, mentioned in a 2008 Gazette report, was probably for a small component of the project and never intended to cover all costs, Higgins says. (Dave Neumann, owner of NSG, didn't return an email and phone call seeking comment.)

Utilities has been criticized by some board members and citizens for investing in technology no other utility uses. Also frustrating to critics is that Utilities was supposed to get a cut of Neumann's profits on sales to other utilities — of which there have been none.

But Utilities officials say the equipment has proven out in analyses by reputable agencies, including the Electric Power Research Institute. Higgins also notes that no other SO2-removal equipment would fit on Drake's 66-acre footprint, flanked by Highway 24 to the north, rail lines to its west and south, and city streets to the east. He also says the NSG technology costs less to operate than traditional SO2 units.

The coal-fired Ray Nixon Power Plant, which generates 208 megawatts on a larger expanse 15 miles south of Colorado Springs, will cost $100 million to retrofit with other SO2 equipment. The vendor, Charlotte, N.C.-based Babcock & Wilcox Co. — chosen in a competitive process in which NSG didn't compete — is due to finish work in fall 2017, says Higgins.

These costs are "all in," to include equipment, site modification, construction and project oversight, Higgins says. Meanwhile, nitrogen oxide, or NOx, equipment is being installed on both plants at a combined cost of $18 million. (Neither plant is being equipped to remove carbon dioxide, a culprit in global warming, for which the EPA hasn't yet issued emissions limits.)

Those costs mean higher rates for customers. But Utilities Board Vice Chair Andy Pico notes the board has taken steps to reduce staff and make other cuts "to minimize as much as possible the impact."

During a tour of Drake on Thursday, Higgins led the way, ducking under cross-bars and stepping over pipes in the cramped quarters. The system uses water and a sorbent, he explained, to remove pollutants through an "extremely efficient liquid-to-gas" chemical process that ends with a by-product called gypsum, the substance in drywall. At full steam, the process will produce about two truckloads of gypsum a day, he estimates, to be landfilled at Clear Springs Ranch.

As for the pending study to decommission Drake in five to 20 years? That decision lies with the Utilities Board, composed of City Council, and the new equipment should assure the plant complies in the meantime.

Higgins sees it this way: "At the end of the day, we've got significant investment at the Drake plant, and we've got to be able to realize some of the benefit." He also notes Drake serves as the city power system's hub, meaning closure would require an overhaul of distribution and transmission systems.

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