July 18, 2012
The Martin Drake Power Plant isn't going anywhere just yet.
The future of the coal-fired power plant south of downtown has been the subject of fierce debate in recent weeks, as Mayor Steve Bach and others have called on Colorado Springs Utilities to consider decommissioning the 87-year-old, 254-megawatt unit.
However, City Council, acting as the Utilities board, voted 7-2 Wednesday to go ahead with plans to install emissions control equipment from the local company Neumann Systems Group and delay a study of retiring Drake until 2013.
Council President and board chairman Scott Hente said Utilities is dealing with millions of dollars of costs related to the Waldo Canyon fire and more unbudgeted expenses wouldn't help. Plus, he said, Utilities has a contract with Neumann Systems.
"It just seems like this was probably the right thing to do," Hente said. "Let's not forget that Drake is a money maker for us: It's efficient, it's reliable and it's paid for."
Neumann Systems CEO David Neumann praised the board's decision.
"All in all, I think this is by far the lowest-cost option for the community," Neumann said.
Council President Pro Tem Jan Martin echoed that sentiment.
"The driving force for this utility board as long as we've been on it is costs," Martin said. "The lowest cost for today is to continue with Neumann."
Neumann Systems was awarded a $73.5 million contract last year to install its NeuStream sulfur dioxide scrubber system at Drake, but has been slowing down preparations for the installation to give Utilities time to make a decision on Drake's future. Neumann said those delays should not affect the total project cost or schedule.
It was widely assumed before Wednesday's meeting - and was the recommendation by Utilities staff - that the board would vote to move the NeuStream system to Utilities' Ray Nixon Power Plant and complete a study on Drake's future by the end of the year. Councilwoman Brandy Williams, who voted against the decision to go ahead at Drake, said she believed rising cost estimates to switch sites drove the change in thinking.
Bruce McCormick, Utilities' chief energy services officer, told the board that switching the Neumann Systems installation to Nixon would cost about $35 million. Even if the board later decided to go back and also install the system at Drake, McCormick said, the delay would add about $5 million. Williams said she was looking for a better explanation of those costs and planned to talk to Neumann about the estimates.
"We don't have any information to make this decision," Williams said. "My opinion didn't change - I still want a study."
McCormick said installing the scrubbers and putting off the study would delay any possible retirement of Drake in the short term, but said it would be hard to predict how it would affect Drake's future over a longer time frame.
Several speakers at the board meeting urged Utilities to consider retiring Drake and focus on conservation, while others praised Drake's low cost and reliability.
Sam Masias, who works in the solar energy industry, said Drake was like an old uncle that you hate to see go, but compared installing the Neumann scrubbers there to putting a "$100 saddle on a $10 horse."
Kanda Calef took the opposite view.
"Drake power plant has served our community well," she said. "Why wouldn't every effort be made to keep these tried and true plants producing electricity?"