Utility Reaches Settlement in Emissions Lawsuit

The Colorado Springs City Council, which also serves as the board for community-owned Colorado Springs Utilities (CSU), approved the settlement of a lawsuit brought against the city’s downtown coal-fired Martin Drake Power Plant, an agreement that in part promises CSU will look at options for 100% of its power to come from renewable sources as early as 2030.

The city council—in executive session and without a public vote—approved a $425,000 settlement with New Mexico-based environmental group WildEarth Guardians. The group had said thousands of violations of the federal Clean Air Act had occurred at Martin Drake. The settlement was filed April 17 in U.S. District Court in Denver, Colorado.

Amy Trinidad, a spokeswoman for the utility, told the Colorado Springs Gazette that CSU denied the allegations in the lawsuit but was still willing to reach a settlement. A bench trial on the suit was originally scheduled to begin in early April, but attorneys in the case informed the court negotiations were underway toward an out-of-court resolution.

Emissions from Martin Drake have put the utility at odds with environmentalists and much of the surrounding community for years. CSU installed a scrubber system at the plant that became fully operational in 2016, at a cost of about $200 million, nearly double the price tag when the project was first discussed. Utility officials said the system has worked well, but the state Air Quality Control Commission in November 2017 said the plant’s emissions were “unclassifiable,” as opposed to in compliance with federal pollution standards for sulfur dioxide (SO2).

The NeuStream scrubber system in use at the plant was developed by David Neumann, a local physicist who was awarded a single-bid contract for the project in 2011. The single-bid process prompted a lawsuit against the city in 2016; the suit cited studies that showed dry scrubber technologies could have been used at the plant, and that the project should have been subject to competitive bidding. The city has insisted the NeuStream system is the best available, and least expensive, technology to control SO2 emissions.

Plans already are in the works to retire the Drake plant. A unit built in 1962 was shuttered in 2016; the two remaining units, producing about 200 MW of electricity and built in 1968 and 1974, respectively, are scheduled for decommissioning by year-end 2035. The plant was offline for a period in 2014 after a fire at the facility.

WildEarth in the lawsuit, which was filed in the district court in February 2017, alleged more than 3,000 violations of the Clean Air Act had occurred at Martin Drake. The group said CSU failed to properly monitor emissions from the Drake plant for more than 300 hours during a period from April 2011 to December 2015.

WildEarth program director Jeremy Nichols told the Gazette after the settlement, “We’re not in this just to punish [Colorado Springs] Utilities or to cause pain. We’re in this to achieve an outcome.”

The agreement calls for CSU to allocate $275,000 to the nonprofit Energy Resource Center for the local group to provide additional home energy-efficiency audits for customers. The utility also will cover $150,000 of WildEarth Guardians’ legal costs from the case.

The utility also said options for 100% renewable energy portfolios, with implementation in 2030, 2040, or 2050, would be part of CSU’s Electric Integrated Resource Plan (EIRP) that is published every five years. The next EIRP is due by August 2020.

The settlement calls for CSU to install opacity monitoring systems at Drake that already were in the utility’s budget as part of routine equipment replacement. The utility plans to install two such systems, each costing $43,000, at Drake, and a third at its Ray Nixon Power Plant near Fountain, Colorado, at a cost of an estimated $40,000.

Darrell Proctor is a POWER associate editor (@DarrellProctor1, @POWERmagazine).