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HGP Inc.
1720 N. Pleasantburg Dr.
Greenville, SC, 29609
P: 864.370.0213
F: 864.370.0215
Suite 127,
PO Box 18540
Reno, NV, 89511
P: 775.851.1532
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Message from the CEO of HGP, Fred Giffels
| 4th Quarter 2009 and Early 2010 | Posted 10/13/2009 |  | A warm welcome to all visitors and returning clients to HGP’s Web Site
Given the events of 2009 year to date, we hope you are still weathering the economic slow down!
HGP has found that performing comprehensive due diligence reviews on mergers and/or acquisitions (M&A), for projects or entire companies is even more CRITICAL and PRUDENTLY NECESSARY in these economic times. One false step in the execution or underlying M&A assumptions can, and often does, cause a project, the management team and often the acquiring or merged company to FAIL, with dire consequences in terms of both TIME AND MONEY for the Key Executives, Stockholders and Debt Holders.
HGP is proud to be a part of the energy sectors resurgence with the expansion of Renewable Energy (wind, solar, small hydro, geo-thermal, and now tidal generation and combo’s) and Nuclear Energy generation technologies for the nation’s electrical generation needs.
● Observations for the balance of 2009 and into 2010
1> The estimated capital cost of the new generation of commercial nuclear plants has risen to well over $6,000 /kW (old forecast was $5,550/kW) – very-very expensive, and maybe, cost prohibitive, if new nuclear plant project life cycle cost savings are not factored in, and the carbon tax is not implemented. The United States or any one USA Company cannot pay the price for this technology alone. New Commercial Nuclear Plants will need world wide support.
HGP has several lifecycle cost saving strategies and other techniques to make new commercial nuclear stations more competitive, less risky and more likely to have their benefits realized as part of the USA’s base load generation mix in the next 5 to 10 years; contact us to learn more. Each Company’s Board of Directors (BOD) considering or embarking on a new commercial nuclear (or other major generation facility) should be monitoring their Management Team on any new commercial nuclear or other major generation facility as many of the current line managers and staff do not know, or have never designed or built, let alone managed a multi-billion dollar project, and their focus and insights leave much to be desired and may put the company and their stakeholders at much greater risk both for not taking action and conversely making imprudent decisions.
2> Renewable Energy is still being led by wind development, but solar and now biomass (base load) are REAL keys to future growth since both have higher reliability and more predictable grid implications than wind. Geothermal (which is also like Biomass - a renewable base load) is an option, but only in limited areas of the country. Wind turbine vendors are seeing a major slow down in orders from clients since project financing has all but dried up the last 9 months. Current R&D efforts indicate some “out of the box” designs will come out and some new products that will REDUCE the cost of EPC and O&M life cycle for both wind and solar. This is one area the Obama stimulus plan for renewables may have an impact on, but it will be 2 to 4 years before we see it commercially.
3> President Obama has proposed some significant Federal grants and loans to the energy sector, most of which have yet to roll out as planned. Problem is, the RED TAPE and the real impact on NEW JOBS is very questionable. One bright light is renewable project loan guarantees which may help stimulate some “dirt ready renewable projects”. We know of at least three renewable projects(geothermal, solar and wind project) that have applied to DOE for this loan funding. All of us in the energy industry hope this focus will create a stronger USA economy, and a more reliable, efficient and CLEAN Energy industry for future generations.
4> 200 days of the new Obama administration has almost passed and the new administration's report card is VERY Mixed to POOR, to say the least. Lots of rhetoric, and some “GREAT Speeches from the President” but not much in the way of ANY REAL Change. The missing part here is the lack of any substance or results - except the negative kind, such as the bankruptcy of Chrysler and GM, and more TARP Money wasted on large Financial Institutions who are making a fortune but not lending it out!
There continues to be little to no accountability to the taxpayers on where the money went and when we will see it paid back. The fact is, it appears that the TARP czars want to ignore US bankruptcy laws and debtor’s rights, which may not bode well at all for a recovery this year or next and will lead to a number of lawsuits and dire consequences for the future of the private debt market. Maybe that is the real plan - socialize and have the government take over?
DO WE REALLY WANT THE FEDERAL GOVERMENT OWNING THE AUTO COMPANIES AND OUR BANKS and CALLING THE SHOTS for MANAGEMENT OF THESE INDUSTRIES? Health care is required and a big concern for all of us, but do we want the Federal Government running this? NO, Oversight yes!
5> Given the current state of the economy, many of America’s businesses cannot hold on much longer, and in fact quite a few of our competitors have gone out of business or experienced major layoffs. HGP has made adjustments to weather this down turn and continues to be debt free to allow us to hold our costs down to support our current and future client base.
6> Wouldn’t it be great if we could get a renewable energy project running at an existing commercial nuclear plant site? Talk about reducing the carbon footprint!
We have continued to propose this concept to several of our Operating/Owner Commercial Nuclear clients who have potentially suitable commercial nuclear sites as well as commercially viable wind and or solar and bio-mass generation sites, but the energy industry is NOT KNOWN FOR MUCH LEADERSHIP or OUT OF THE BOX THINKING. Many IOU CEO’s are claiming to be green but just like the NIMBY’s not on our sites.
This is due to the fact that being innovative and demonstrating leadership in the utility business is not often rewarded by the regulators or Wall Street. This is now resulting in some major rate case filings with a number of large IOU's across the USA. Rate shock is coming and transmission and new generation are sorely needed, but the investors need to get a fair return on their capital investment if we are to become more Green and Energy independent in the USA. Things will change when the boardrooms represent the stockholders, and the operating officers wake up and realize that Key Officers with NO VISION or Leadership ultimately doom the company to failure or takeover.
HGP has been assisting our clients for over 30 years in this area, but what is NOT new news is that HGP continues to share the commercial risk/reward with our clients based on our dedication to the success of our clients.
Contact us for additional details.
We look forward to a forecasted expansion of the energy industry’s Merger & Acquisitions (M&A) resurgence later this year and rising in early 2010. On this expansion the focus on due diligence will be CRITICAL.
Our West Coast office in Reno, Nevada has several commercial wind measurement projects underway in Nevada and California. Near term, we are working with the University of Nevada, Reno on several DOE Stimulus renewable grant proposals. More to come later this year.
● Contact Us
Contact us to give us your comments or to discuss how HGP can help your company succeed:
Email us at: HGP@HGP-Inc.com
● Recruiting
At this time, we are still actively recruiting for an Executive Vice President of Operations who has a business development and operations track record with potential for Equity Participation for our Corporate Office in Greenville, SC or Reno, NV office.
In addition, we are always on the lookout for Executive Consultants, Project Managers, and Support Staff as well as IC’s for the Company’s projects.
Remember that Relocation is not necessarily required and depends upon the project assignments, as many of our Client’s today want virtual project work over the web.
See our ad in the Employment Section of this web site.
We wish you the Best of Success for the rest of 2009 and into 2010 and beyond!
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Fred W. Giffels, CEO
Higher Goals Performed
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"Dedicated to the Pursuit of our Client's Success"
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