Questions Of Legality, Financial Impact Should Compel Legislature To Reject Alpine Energy Group Proposal
Q. Why should the Legislature reject the Alpine Energy Group (AEG) proposal on Monday?
A. Because based on documents we’ve read, Alpine should never have been allowed to bid on the project in the first place.
Q. Why else should the Legislature reject the Alpine Energy Group proposal on Monday?
A. Because if they don’t, the Diageo deal may never provide the return on our investment that was promised.
Stay with us.
The answer to the first question is simple mathematics. AEG did not meet one of the basic initial requirements of the original Request for Proposal from the Water and Power Authority for the project. According to documents on file in the Colorado Office of the Secretary of State (CSOS), AEG, incorporated in September, 2007, had not been an established business for three years prior to bidding on the job in December of that same year and had no relevant experience.
There is no record of a “parent” or “affiliate” company related to AEG on the CSOS website and nothing to indicate any prior entity from which AEG could have been formed to establish the required “history.”
This is not a new issue but during its AEG’s first attempt the question of the date the business was established got buried in the pet coke debate and as the measure was rejected, never returned to the forefront.
Both WAPA Executive Hugo Hodge and AEG representative Don Hurd were questioned about Alpine’s creation date and whether they had relevant experience during a public meeting at St. Thomas’ Charlotte Amalie High School during their first attempt to gain approval in the Territory.
Hodge said:
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And Hurd, who gave conflicting information on Alpine’s formation date than appears in documents, responded this way to a question about their prior relevant experience.
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As always, CIF welcomes rebuttal on any of the issues raised relative to this proposal and will publish them if they can be verified.
The Request for Proposal
The following information was taken directly out of WAPA RFP PR-11-08 ATTACHMENT G – Criteria for pre-qualification and for non price evaluation.
PR-11-08
Request for Proposal
To Provide Electric Energy to the
Virgin Islands Water and Power Authority
DATE ISSUED: December 28, 2007
OFFERS DUE: May 1, 2008
ATTACHMENT G – Criteria for pre-qualification and for non price evaluation.
“Criteria for Pre-qualification (Respondent must PASS all to pre-qualify).
- Company Information: Pass/Fail Comment
- Company or affiliated parents established for more than three years?
- Respondent has demonstrable experience operating generating facilities similar to the one being proposed?
Respondents who are proposing new technologies (e.g. OTEC, wave) must demonstrate relevant experience that will ensure WAPA that they can successfully build, finance and operate the proposed solution.”
According to official state documents at the Colorado Secretary of State’s office, AEG was established in September 2007. They had no affiliate Parent Company on record at the time of this establishment. Alpine was established 3 months prior to WAPA’s release of its RFP.
This date was confirmed as recently as December 18, according to the “Certificate of Good Standing” on file in the CSOS office. The Certificate states:
“I, Scott Gessler, as the Secretary of State of the State of Colorado, hereby certify that, according to the records of this office, Alpine Energy Group, LLC is a Limited Liability Company formed or registered on 09/25/2007 under the law of Colorado, has complied with all applicable requirements of this office, and is in good standing with this office.
This entity has been assigned entity identification number 20071439442. This certificate reflects facts established or disclosed by documents delivered to this office on paper through 12/15/2011 that have been posted, and by documents delivered to this office electronically through 12/18/2011 @ 05:58:56.”
Therefore, they were never eligible to bid on this project and, absent some evidence to the contrary, approving their proposal would be one more illegal act related to a government contract.
Didn’t they get the message from the Legislative Audit findings that this is not a good idea?
The Diageo Deal
The AEG facilities are planned for a 20-acre site leased from the St. Croix Renaissance Group (SCRG) – the Diageo plant is located on SCRG land as well. (See pg. 6, Alpine Letter to EPA Attached)
Enter the Environmental Protection Agency (EPA).
The EPA establishes emission ceilings based on the total emissions from a defined area, in this case the SCRG. Therefore it takes into account the emissions generated by any entities that hold leases on the site, in this case including Diageo, in determining whether standards are being met.
The Diageo plant is operating at significantly less than capacity and even at these levels, emissions are evident to anyone living downwind from the distillery. Despite promises made when the infamous rum deal was struck, this year alone, the loss in cover-over revenue to the Territory based on the 45% share Diageo is entitled to under the terms of the agreement (and the consequences of the Cruzan Rum agreement that followed) has been placed at $73 million.
AEG was required to submit information to the EPA on the emission levels expected to be generated from its waste-to-energy facility (letter attached). The 48-page document outlines their case on anticipated emissions levels, including the fact that they will generate their own electricity and not rely on the emission laden boiler system that provides energy to others leasing land at the Renaissance site.
However true their estimates may be, any addition to the emissions at the site will bring the entire SCRG property closer to its established ceiling and any increase in production at the Diageo plant may well push the property as a whole over its EPA limit.
So while we’ve been hearing about labor and materials issues as the reasons behind Diageo’s lagging productivity, could it be that they are producing as much as they can and still remain under EPA emissions guidelines for the SCRG site?
The Diageo agreement established minimum production guidelines that had to be met for the cover over agreement to remain in place. But those guidelines were not the platform for the revenue projections used to promote this arrangement to the public, and will not generate the payback to offset the overwhelming total payments the Territory is bound to in this ludicrous (minimum of) 30-year contract.
So be advised, Senators, the impact of a “yes” vote on the apparently illegal AEG contract proposal carries consequences far beyond the need for a solution to the Territory’s waste removal issues. Aside from issues of legality, which we have seen carry little weight with this Administration, the impact on any hope of realizing even limited benefits from the rum fiasco is astronomical and will be suffocated beyond resuscitation.
Are you prepared to smash the final nail into the coffin?
Does the VI want to be the owner of the WORST waste management deal ever done in the U.S.? If so sign up.
Sign this petition against Alpine’s plans
http://www.no-burn.org/vipetition
This deal is worse than Diageo……30 year lease, guaranteed $20million in profits, illegal RFP with NO competitive bidding, two additional 10 year options to lease, full government backing for the investors (so if they fail, we are still on the hook), WMA introduces exorbitant fee structure to pay for the profit margin guarantee, WMA staff increases significantly to ‘monitor’ Alpine project……
And who says a fool is not born every minute? These guys are a sham consulting firm and will rake in the dough on doing a project they have never done before. We simply cannot afford to do another upside down project. We are getting the shaft all the while kickbacks are being made for votes……anyone with common sense would have shot this deal in the foot 4 years ago.
Common sense being the optimum word. Oxymoron when used in conjunction with a senator.
Anon@8:25
Why not? We already own the worst WAPA in the entire world! Makes for a matched set.
Is EPA going to testify about whether waste to energy in our best or worst interest?
No, just the entire Alpine team, their ‘investor’ and may and Hugo and Chakroff. The usual gang of scam artists.
@admin, where’s the blog for the alpine hearing?
Mr. Hixon if Alpine Energy Group, LLC commited no fraud answer these questions and submit AEG prequalification submission to the WAPA RFP to this website administrator for the world to see. That is a direct challenge to you and AEG Mr. Hixon. Provide that evidence to substantiate your claim that AEG committed no fraud.
PR-11-08 Request for Proposal To Provide Electric Energy to the Virgin Islands Water and Power Authority DATE ISSUED: December 28, 2007 OFFERS DUE: May 1, 2008
ATTACHMENT G – Criteria for pre-qualification and for non price evaluation.
“Criteria for Pre-qualification (Respondent must PASS all to pre-qualify).
1. Company Information: Pass/Fail Comment
2. Company or affiliated parents established for more than three years?
3. Respondent has demonstrable experience operating generating facilities similar to the one being proposed?
Poor Andy…. He’s lost for words….He’s probably somewhere sitting in the corner biting his nails. Ouch!
your beinglaughed at by alpine. andy is here on company ordersto carry out a misson entrustd to him, he isan enginere, not a finincial or legal officer of the company, his job is o talk about the science and keep you foused on that alone, I know we all think if we dig up the facts and question there legality that this insome way will make a difference, a sad truth is no one but us is listening.
the govenor and the senate and WMA all belive this project kills two bids with one stone they will sell the farm to get it done.
alpine belives it can get the teratoryto sing into a deal that practial ensures no loss or risk to there investment partner EFI.
wapa belives it will recive pwer at low cost ith someoe else doing the maintanance, they alone will be doing the final sale and have no intention of passing any savings to the consumer.
everyone profits or gains except the public
Poor Andy the liar. Got caught telling so many lies on CIF he just can’t keep up with them. First it was James Beach now its Don Hurd jerking poor Andy’s chain.
What one would do for a dollar. No integrity what so ever.
Birdy is saying AndyH got fired.
Don Hurd is the little birdy correct? Did you fire AndyH or did you beg him to stay?
Anons:
Thanks for your concern, but I am alive and well. No issues with my employment at Alpine. I’m also not worried about my freedom as others on CIF have suggested. I’ve seen a couple people mention fraud or lies I have written. If you point out something specific, I’d be more than happy to respond. I’m not aware of any lies I’ve written on here, testimony to USVI Legislature, letters to EPA, etc.
With respect to Investigators question about the pre-qualification requirements, I answered this question on a separate thread. However, I’m more than happy to copy/past my same comment here . . .
Investigator:
In Alpine’s original bid, quoting directly from the pre-qualification form submitted February 2008, “Our proposal will be submitted as a consortium between Alpine Energy Group and Energy Investors Funds.” Both EIF and Alpine were listed under the company contact and company information sections of the form. EIF was founded in 1987 as the first private equity fund manager devoted exclusively to the independent power business. Some people have made claims that Alpine’s proposal or selection was illegal because the company was not in business for three years prior to the proposal.
Although Alpine was founded in 2007, qualifying for the RFP was never an issue because EIF has been in business since 1987, far exceeding the three year requirement. Again, Alpine’s proposal was evaluated as a partnership between Alpine and EIF. It’s also worth mentioning that although Alpine Energy Group was not founded until 2007, the people working at Alpine have anywhere from 10 to 50 years experience working in the power industry, not to mention the 100+ year experience of the equipment vendors and contractors that are prepared to make this project a reality.
Alpine’s experience coupled with the expertise of EIF provide the USVI with an exceptional team. The staff of Alpine have developed, negotiated, and/or been material parties to well over 100 transactions involving power purchase agreements to supply energy. Since its inception, EIF has made over 100 investments with a total asset value in excess of $15 billion, and currently has over 50 plants in their portfolio. Today EIF has 39 employees managing those 50 plants. They also have a support team of 50 experienced power plant managers who have decades of hands-on experience building, operating, and managing power plants. So together with their operations team, EIF has a team of almost 100 people whose experience and expertise can be brought to bear on this project.
If there is any doubt whether Alpine has the financial backing to make this project a reality or stand behind the financial commitments that I have described previously, surely EIF’s involvement in the project demonstrates that this team is well qualified.
At the end of the day, I can’t tell you how WAPA evaluated Alpine’s proposal or graded out the scores in Attachment G of the RFP. From what I recall, WAPA received more than 20 proposals that included WTE, solar, wind, OTEC, and coal. Those bidders were shortlisted to six potential projects selected to negotiate a PPA. Three of those six shortlisted bidders included a waste-to-energy component to their project, including Alpine. So in addition to the PPA negotiations, WMA also evaluated these three bidders as part of WAPA’s RFP process. Eventually, Alpine/EIF was the only company that successfully negotiated a PPA with WAPA as part of the 2008 RFP process. I don’t know details about the other companies that bid on the RFP. However, in my opinion, the process was competitive and rigorous.
As a follow-up, I’ll see what I can do about getting Alpine’s pre-qualification submittal and WAPA’s response uploaded to CIF. Should be able to get it out by the end of the day.
AndyH is EIF Alpine’s parent company?
Mr. Hixon thank you for your response. Please review below and be as clear as possible in your response to the pointed questions.
Question: On what day, month, and year was Alpine legally formed?
Question: In what U.S. jurisdiction did the formation take affect?
Question: From the periods of Alpine’s formation date to March 1, 2008, did Alpine have a legally registered parent company?
Question: List said parent company, its formation date, and U.S. jurisdiction which legally registered?
Question: Was EIF Alpine’s parent company at the point AEG submitted its pre qualification bidders form and there after?
Question: Why the continued resistance by Mr. Hurd and yourself to release the actually Alpine pre qualification bidders form to this website for public viewing. The information is public information. Why the resistance?
To assist you at recalling the specific requirements of the WAPA RFP with regards to my questions see below. Thank you in advance for your prompt cooperation.
PR-11-08 Request for Proposal To Provide Electric Energy to the Virgin Islands Water and Power Authority DATE ISSUED: December 28, 2007 OFFERS DUE: May 1, 2008
ATTACHMENT G – Criteria for pre-qualification and for non price evaluation.
“Criteria for Pre-qualification (Respondent must PASS all to pre-qualify).
1. Company Information: Pass/Fail Comment 2. Company or “affiliated parents” established for more than three years? 3. Respondent has demonstrable experience operating generating facilities similar to the one being proposed?
Mr Hixon am I to assume your lack of response and cooperation on this important matter an indication of Alpine Energy Group, LLC admission of guilt?
“AndyH on January 30, 2012 at 1:35 pm
As a follow-up, I’ll see what I can do about getting Alpine’s pre-qualification submittal and WAPA’s response uploaded to CIF. Should be able to get it out by the end of the day.”
The Alpine con men are on the run. Pressure buss pipe!
Good. Run they r*$$ YES.