Engineering company foresees big profits in system to cut pollution causing acid rain.

Engineering company foresees big profits in system to cut pollution causing acid rain

RCM Technologies Inc. isn't jumping on the bandwagon when it says it's concerned about clean air. The company's bottom line may depend on a new system that can cut down on acid rain.

Since 1985, the Los Angeles-based engineering and consulting company has been pouring millions of dollars into a new technology that could cleanse the emissions of coal-burning power plants across the Midwest. Last week the $22.7 million (1989 sales) company, in anticipation that deals with a number of plants will be struck soon, chose a Chicago company to build pollution-control devices that will cost roughly half the price of existing emission control systems.

The majority of coal-burning facilities, along with other polluting industrial plants, are facing tightened emission standards under new federal environmental edicts.

Last August RCM announced test results from a Camden, N.J. coal-burning power plant indicating "System 99" can eliminate 95 percent of the sulfur dioxide and 81 percent of nitrogen oxides. Those pollutants are the two main ingredients of acid rain.

RCM's stock (NASDAQ: RCMT), climbed 25 cents a share to $4.19 after the CBI deal was announced. RCM lost $637,000 on sales of $18.3 million in 1988. In 1989 it lost $734,000 on revenues of $22.7 million. Company officials expect sales of $30 million this year, but would not say whether the company would go into the black.

Most of RCM's revenues have been generated by its subsidiary, Intertec Design Inc. The L.A.-based subsidiary provides temporary personnel to high-tech companies like Boeing, DuPont and United Technologies.

RCM Chairman and CEO Robert Sackett said the company has met with 10 coal-burning utilities to date, and expects a possible joint venture with CBI to market System 99. Company officials would not say when a deal with a plant would be completed, but reported a contract with an undisclosed facility in Indiana is in the works.

"We have the technology nobody has," Sackett asserted.

Most of the nation's coal-burning power plants rely on bulky equipment called scrubbers that remove gaseous pollutants through a chemical reaction. The problem with that method, according to Sackett, is that the scrubber equipment must constantly be replaced and the excess waste hauled away.

RCM's equipment, however, relies on the so-called "dry regnerative process" in which harmful gases are physically absorbed through a system of catalytic reactors and pre-scrubbers. That process requires little maintenance, few replacement of parts, and no disposal problem for plant operators, RCM officials claim.

Besides being more effective in purging pollutants, RCM claims System 99 can get the job done cheaper.

Right now it costs typical coal-burning plants between $9 million and $11 million a year to purge its emissions of pollutants, though federal regulations on those facilities are considered loose.

But Debbie Sheiman, an environmental analyst at the National Resources Defense Council in Washington, D.C., said RCM's equipment is just part of a host of new pollution-control devices being studied.

"There are an awful lot of options for cleaning up emissions, including the dry-flue process which has been around for years," Sheiman said. "The question is in making it cost effective, and those costs will come down when legislation is passed because demand will go up."

That assessment doesn't discourage Sackett. He said RCM is "well positioned" to keep the coal-burning plants afloat after new laws are put on the books.

"We have the technology that is in tune with the present and future clean air law," Sackett added.