In a press release on July 27, the city of Denton reported that it found no fatal flaws in the Denton Energy Center procurement process and no evidence of fraud or criminal activity.
The city added yet another layer of scrutiny to the Denton Energy Center project this week — an independent review of its air permit application.
The Denton Energy Center is a new, natural gas-fired power plant being built northwest of the airport. It's one of the city's largest-ever capital purchases, estimated to cost between $225 million and $265 million.
A handful of residents told the Denton City Council on Tuesday night they were skeptical of the estimated emissions submitted to the Texas Commission on Environmental Quality, particularly after other problems with the project recently came to light.
City officials announced Friday morning they had asked the Kansas engineering firm Black & Veatch to review the air permit application for the power plant.
“We want to be sure that the emissions are exactly as portrayed,” said City Manager Todd Hileman.
Black & Veatch is Denton’s “owner engineer” for the Denton Energy Center. An owner engineer looks over the shoulder of the project engineer (in this case Missouri-based Burns & McDonnell). Typically, an owner engineer is hired to help develop a project before the owner makes any purchases and issues contracts.
However, Denton’s contract with Black & Veatch wasn’t signed until March, several months after Denton Energy Center construction began.
About $500,000 of Black & Veatch’s $964,000 contract includes setting up emissions testing before the plant can begin making electricity. Twelve natural gas engines make up the heart and soul of the power plant. State environmental officials ostensibly witness the testing to verify that the emissions from the engines comply with the permit.
The engineer assigned to the project has worked on comparable power plants in Bangladesh, Mexico and Tanzania, city records showed.
This week, the city asked Black & Veatch to also review the quality of the information on the permit, Hileman said.
Zachary Youngblood, a University of North Texas engineering student, told the City Council Tuesday night that hourly emissions rates on Denton’s air permit differ markedly from publicly known data about the engines, including hourly emissions rates from a comparable power plant in Edinburg, in South Texas.
The permit application was completed by engineers at Burns & McDonnell and submitted to the state for approval before Denton Municipal Electric publicly announced the project.
Kristi Widmar, spokeswoman for Burns & McDonnell, did not respond to a request for comment.
Power plants are usually considered a major source of new emissions, which trigger additional review requirements and public hearings. By pledging to run the power plant only in the summer, DME sought a different kind of permit that avoids that additional level of scrutiny, even for Denton's poor air quality.
In addition, DME’s former general manager, Phil Williams, had said the city-owned utility requested additional pollution controls on the engines in order to meet the state requirements for a minor source permit.
DME has never publicly released the emissions data that was made part of the construction contracts. Because federal law pre-empts such withholding, state law typically does not allow the withholding of environmental information from public scrutiny.
Williams resigned last month after other contracting irregularities with the Denton Energy Center came to light. Two other high-level employees at DME were fired in wake of the investigation.
Last year, DME recommended the city walk away from coal-fired power by 2018 and put the Denton Energy Center in its place. The new power plant would allow DME to negotiate renewable energy contracts on its own terms. The new power plant would also allow DME to make money selling electricity to the Texas grid.
By its own estimations, DME expected the power plant to supply only a small fraction of the city’s electricity. Earlier this year, DME announced that 88 percent of the city’s electricity would come from renewable sources by 2019.
In addition to ensuring the air permit contains accurate information, Black & Veatch's review is expected to provide the city an explanation of the differences between publicly available information about the engines and the information DME has.
The city has not yet hired an outside firm to review DME’s plan to change the city's energy "portfolio." City officials decided the portfolio review was necessary after the contracting irregularities came to light. The review would include both the plan to buy more renewable energy and how to best operate the Denton Energy Center.
Hileman said the city is vetting two possible firms for the job, including making sure they don't have prior relationships with the companies working now on the Denton Energy Center.
"We want to make sure they are truly independent," Hileman said.
PEGGY HEINKEL-WOLFE can be reached at 940-566-6881.
FEATURED PHOTO: A sign shows where the new Denton Energy Center will be located as construction continues on Jim Christal Road near Denton Enterprise Airport in west Denton.
DRC file photo