Denver’s 143-year-old city steam system facing challenges |…

The explosion at the Gumry Hotel at 1725 Lawrence St. in Denver went off just after midnight.

The magnitude of the blast was so great that all five floors of the brick-and-stone hotel collapsed into the basement, killing 22 people, including owner Peter Gumry. The blast broke windows for blocks. It was heard well outside of Denver.

The stone and brick facade along Lawrence remained standing. The date was Aug. 19, 1895.

The cause of the explosion was quickly determined to be the 48-foot-long steam boiler used to power the hotel’s elevator. The boiler had a history of poor repair, breakdowns and leaks, according to reports at the time. Three months before the explosion, the Denver boiler inspector ordered repairs, but never verified the repairs had been completed.

The Gumry Hotel was not connected to what is today the oldest continuously operated commercial district steam heating system in the world, owned and operated by Xcel Energy, Colorado’s largest energy utility company. 

While steam powered Denver’s buildings for roughly a century and a half, its future is uncertain. Steam uses natural gas, a target of environmental activists and their allies who view it as “unclean” energy that contributes to climate change. Colorado, as a state, has embraced renewable energy, with mandates for buildings to cut down fossil-fired energy at specific timeframes. The goal, ultimately, is 100% “carbon free” in just a few decades.      

The steam that heats Denver

Fifteen years before the tragedy, four wealthy businessmen formed the Denver City Steam Heating Co. to supply steam for heating, cooking and other uses. The company began delivering steam in 1880, after laying a network of steel pipes wrapped in asbestos and insulated with hollowed-out logs throughout downtown Denver. The system now measures about 10 miles of piping.

Boiler explosions and fires were not unusual at the time because most large buildings — and the Gumry Hotel was one of the larger buildings in Denver — used steam for heating. As technology advanced and steam-powered elevators and other equipment became more popular, higher steam pressures were required. Higher pressures meant greater danger and required better-trained operators to safely operate the boilers, according to historians.

The Gumry building had two boilers: one for heating, the other for the elevator. Both were operated by 20-year-old Helmuth P. Loescher, an inexperienced operator sometimes characterized as “dissipated and unreliable” and who was said to often be drunk, according to contemporary news reports.

Loescher, who was alleged to be in a saloon at the time of the explosion, fled Denver for California that night, afraid he would be lynched. He was captured days later in Antonito in southwestern Colorado. Returned to Denver, Loescher was charged with two crimes. He was ultimately declared innocent by a coroner’s inquest, which concluded no individual could be blamed for the blast.

Three days after the explosion, the boiler-operators trade association, the National Association of Stationary Engineers, said in an article in the Aug. 22, 1895 edition of the Rocky Mountain News: “We cannot but condemn the common practice of boys and drunken, incompetent men at starvation wages to have charge of steam boilers, as is the practice in the City of Denver.”

While the Gumry explosion was not the trigger for building the steam system, it prompted Denver’s complete rewrite of boiler and operator ordinances. It’s also said to have stimulated more building owners to connect to the city steam system and abandon their in-house boilers.

Denver grew rapidly after 1879, during Colorado’s silver mining boom, when the U.S. government started buying large amounts of silver for coinage. From 1880 to 1890, the U.S. Census said Denver’s population increased from 35,629 in 1880 to 106,713 in 1890. That boom collapsed in 1893 with the repeal of the Sherman Silver Purchase Act.

In 1895, Denver still grappled with a depression, poverty and a flood of unemployed silver miners coming down from the mountains looking for work.

By 1923, when Public Service Company of Colorado (PSCo.) acquired the municipal steam system, there were 295 customers on the circuit. During the aftermath of the Great Depression and the doldrums of post-World War II America, the system dropped to only 54 customers.

In 1948, an 8,000-foot-long, 14-inch-wide pipe was laid from the Zuni electrical generating station at West 13th Avenue and Zuni Street to connect to the system to deliver steam extracted from the generator turbine.

In 1964, PSCo. contracted with the state to buy and operate the boiler plant that serves the state Capitol complex, creating a triangle of steam generating plants, each about 2 miles from the other, which increased both capacity and reliability of the system.

The Zuni Station was retired in 2015, decommissioned in 2021, and is scheduled to be demolished and remediated. After public outcry, Xcel suspended the demolition, while consideration is being given to turning the 7-acre lot into public space.

The steam production cut off by the closure of the Zuni plant was replaced by the installation of a third boiler at the company’s steam plant at 19th Avenue and Wewatta Street.

Today, PSCo. is a subsidiary of Xcel, and the system supplies steam to 117 unique metered loads.

Xcel said the system uses about 1.1 million MMBtu of natural gas and 600 million gallons, or 1,841 acre-feet, of water per year from Denver Water’s system.

A new challenge: Electrification

Today, Denver’s unique steam system is facing a new challenge: electrification.

The city’s office of Climate Action Sustainability and Resiliency (CASR) wants building owners to move away from steam because the steam is generated by natural gas — to full electrification, primarily by installing heat-pump systems. The office is offering rebates to offset the difference in cost between replacing a gas system with a heat pump.

“It’s certainly something where we’re seeing emissions from that (steam plant) adding to global warming that we are actually trying to regulate,” said Jeff Tejral, manager of electrification at CASR. “I’d say electrification is the prime alternative that we and others are working on. And electrification is really moving from natural gas combustion in buildings to using heat-pump technology to move energy, both heating and cooling, which is 2½ to five times more efficient.”

The climate office is offering a financial incentive to building owners to disconnect from the steam system and choose electricity over natural gas. The program funds the cost differential between an electric building conversion and replacing an existing natural gas system. Denver’s electrification ordinance only triggers when a gas system reaches the end of its useful life and must be replaced.

While critics said that rebates and subsidies being offered by the city merely socialize the costs by imposing them on people who may not get any benefit from them, Tejral argued that rebates change equipment markets by increasing demand for new electric systems which, he added, should bring the prices down.

“And that’s what we’re really focused on right now with our rebates — is really helping that market transition to where rebates are not just the thing that we do all the time,” Tejral said. “It’s something we do as a thing to actually change those markets. And then once they are, it’s more cost effective to do electrification.

“We know steam buildings are looking to get off of the loop due to cost,” Tejral added. “And as they evaluate whether they move to natural gas or electric, we’d like to help them. And, again, stimulate that idea that if they can put in heat pumps, we would pay that cost difference between a gas system and electrifying with heat pump technology in their building.”

Xcel Energy raised steam rates by 36% in 2019 to pay for installing the third boiler at the 19th and Wewatta station.

Even so, the future of the still-hardy system remains in question because of climate concerns raised by activists and elected leaders, who have adopted an aggressive transition away from fossil-fired energy. When Xcel shut down the Zuni Plant’s power generation in 2015, the company kept the boiler running to keep the steam system balanced until the new boiler was installed.

Officials in Denver, Gov. Jared Polis and the General Assembly are determined to shut down all use of natural gas for power production statewide by 2040.

“The difference is that our electricity is going to be zero carbon soon,” said Katrina Managan, director of the Denver Climate Office in an interview. “So, Xcel is regulatory-bound to deliver 85% renewable electricity by 2030 and carbon-free electricity by 2050. So, moving off of gas onto electricity eliminates all of those greenhouse-gas emissions from burning natural gas over the life of the equipment.”

“That’s the goal of all of this work — is to eliminate the carbon emissions from the gas systems,” Managan said. “Electrification is the pathway.”

Steam and historic buildings

Xcel described steam on one of its information sheets as providing “an essential service in a compact footprint, offering a reliable choice for downtown energy needs.”

The company said the steam system serves some of Denver’s most iconic buildings, such as the state Capitol, certain Denver City and County buildings, the Colorado Convention Center, the U.S. Mint, and the Denver Center for the Performing Arts.

“A lot of these are … historic buildings,” said Joe Schwark, business development manager for thermal energy at Xcel in an interview with The Denver Gazette. “They have a lot of legacy infrastructure. They have issues like asbestos. There’s definitely limitations and challenges to convert.”

Maintaining the 143-year-old steam system has its own challenges. While all of the original steam pipes have been replaced, Schwark said there is still about 2,500 feet of pipe dating back to 1911. The challenges of keeping the system operating falls on 16 members of Xcel’s Thermal Energy Department.

“There is quite a bit of work involved. I think one of the big challenges that we have is maintaining the 10 miles of distribution piping in the street,” Schwark said. “It’s just really, really expensive to do any type of maintenance out in the streets and that piping is old, so we’re always fixing leaks and always interfacing with other utilities, whether it’s the water utility or fiber optics. Dealing with traffic and public safety is a huge challenge.”

The 16th Street Mall project is one of Xcel’s most complicated issues today, and coordinating with the city — and with all of the other utilities — is critical because the company only has 117 steam customers, said Tyler Smith, Xcel’s director of regional government affairs.

“They’re super-cost sensitive, because that’s not going to be socialized across a million electric customers or a million gas customers,” Smith said. “So, we’ve got to be really cognizant of that.”

District system advantages

While Denver’s steam system is the oldest, according to the U.S. Energy Information Administration, there are more than 660 district energy systems operating in the U.S., with installations in every state, providing heating to an estimated 5.5 billion square feet of floor space.

In addition to Denver, major U.S. cities with downtown district energy systems include New York, Boston, Philadelphia, San Francisco and Minneapolis.

Copenhagen is considered the gold standard of district energy. Denmark’s capital has the largest system in the world and serves 98% of Copenhagen’s buildings.

The utility operator is working to make the system carbon-neutral by 2025 by replacing fossil fuels with wood pellets from sustainably grown forests, as well as by investigating the use of large-scale heat pumps running on wind and geothermal energy that incorporate heat storage using large water tanks, according to C40. The group is a global network of nearly 100 mayors of the world’s leading cities seeking to confront what many have described as a climate crisis.

The DOE Office of Energy Efficiency and Renewable Energy said district energy systems that generate electricity are often configured as microgrids. In a microgrid environment, the district energy system can continue to deliver thermal energy and electricity in the event of a grid outage.

District energy systems, said the energy office, offer many benefits, including economies of scale, safety, reliability, energy security, and resilience.

“We understand that Denver has the electrification ordinance,” Schwark said. “Obviously, steam is generated with natural gas, so it’s carbon-intensive. But, I think, at this point, while Xcel is still figuring out what options are available to our customers, the city’s willing to work with a lot of the steam customers. We want to decarbonize, as well, but we also need to provide reliable energy, and it’s got to be cost-effective. So, we’re trying to balance everything.”

Xcel is looking at the possibility of using geothermal heat. But because it requires quite a bit of real estate, which is at a premium in Denver, Schwark said challenges exist.

“There was geothermal legislation last year, and the Colorado energy office just opened up some geothermal grants. And so, we’re also looking at pursuing those as well,” said Tyler Smith, director of regional government affairs for Xcel.

“When you’re thinking about policies and whether the company’s going to support them, we look at it through a lens of is it going to be reliable? Is it going to be cost affordable, and is it going to be ever-increasingly clean?” Smith said.

“I think ultimately at the end of the day, we want to give our customers the choice around what their energy needs are. And for some it may be steam, for some it may be natural gas, and for others, they see a benefit in electrification. So, keeping the choice is paramount for our customers.”

In Denver, the long arc of steam power since the 1895 Gumry disaster has been a critical part of that choice. Whether that system survives remains to be seen.