Healy Clean Coal: Rewarding cheats and con men

Healy Clean Coal: Rewarding cheats and con men


After twenty years of screwing both the State of Alaska and the US Department of Energy over a clean coal plant that they wanted built in the first place, it looks as if the Palin administration is on the verge of allowing Golden Valley Electric Association to screw the state one more time.

According to sources, the Palin administration is reportedly close to a deal that would have AIDEA, the state's economic development arm, basically give away the $300 million clean coal plant completed in 1999 to GVEA, the very same utility which backed out of paying for the plant and cheated the state out of tens of millions.

Over the last eighteen years, GVEA has used one excuse after another in refusing to accept responsibility and management for a plant that they were hoping to get for free at taxpayers expense. Instead, over the last ten years the plant has been sitting idle, with GVEA putting up roadblocks in front of AIDEA's attempts to utilize the asset.

Finally in November of 2005, the Murkowski administration had enough of GVEA's stalling tactics and filed legal action.

But then along comes Palin and after stacking the board with her cronies, is now proposing to let GVEA be rewarded after screwing the state for the last twenty years, for her own political gain.

Funny, if GVEA were Exxon, something tells me this wouldn't be happening.

Whats worse is when you look at the cast of characters involved in this giveaway of a state asset, you can't help but be alarmed.

Since Governor Palin has come into office she has replaced the head of AIDEA with a fellow Wasilla crony and planted her resident babysitter and former administrative problem child, Ivy Frye, at AIDEA. Inside sources confirm she seldom attends work, preferring to hang out in the Governor’s suite.

But the biggest red flags are those who have something to gain with the GVEA giveaway.

In March, Palin appointed Steve Haagenson as the head of the Alaska Energy Authority and as the State Energy Czar.

So what was Haagenson's prior job?

He was CEO of Golden Valley Electric Association (GVEA).

In his brief stint as State Energy Czar, lawmakers have complained that he has totally botched the renewable energy grant program and has so far failed to deliver the statewide energy plan on December 17 as he promised a week earlier while speaking to the Anchorage Chamber of Commerce.

Sources say the delay in releasing the energy plan was due to criticism about the plan Haagenson described to Chamber members on December 8, wasn't a plan at all, it was simply a menu of options. The delay was necessary in order for AIDEA to rush this giveaway of the coal plant through to try and add substance to a weak energy plan and to provide cheerleading material for Palin's state of the state speech.

Multiple sources confirm that Department of Revenue Commissioner Pat Galvin, who is an AIDEA Board member, and Fairbanks Representative Mike Kelly have engineered a sweetheart deal giving away the HCCP to GVEA.

According to my sources, Kelly has long promised to right this situation and resolve the issue in favor of GVEA.

So what was Kelly's former job before he landed in the legislature?

Like Haagenson, Kelly is a former CEO of Golden Valley Electric Association (GVEA).

HCCP was built by AIDEA for GVEA in a deal when Kelly was CEO of GVEA. The HCCP cost AIDEA $300 million to construct and after years of GVEA refusing to accept the plant or pay for it, it has been written down on the AIDEA books in 2002 to some calculation around $180 million. In the 2005 lawsuit filed under the Murkowski administration, the state was suing GVEA for $167 million in damages.

So because Kelly was CEO during the time the coal plant was being built for GVEA, he has had this albatross hanging around his neck for the last decade. It has long been rumored that Kelly and the GVEA Board are still working to save face over a deal gone wrong years ago with the state now picking up the tab.

Galvin and Kelly’s deal basically gives HCCP to GVEA. Cost will be $50 million, with 100% long term financing at 5% interest by AIDEA. AIDEA immediately pays $45 million in “restart” costs. That means the state nets out $5 million while GVEA gets a plant that will provide a profitable long term revenue stream.

Documents obtained by a legislator explicitly confirm reports from an outside source that Galvin and Kelly have told the GVEA board and management that the deal must be done “before Mike Chenault takes over as Speaker of the House," on January 19,2009.

Why the rush to get this deal done so fast?

One reason is that Chenault represents the Kenai Peninsula where Homer Electric Association already has an offer on the table of $85 million to purchase the plant from AIDEA.

Sources outside the legislature have alleged that Rep/ Kelly used his position as Budget Subcommittee Chairman for DCCED with administrative authority over AIDEA to obtain confidential information about the HEC offer that he took to an executive session of the GVEA Board.

There are rumors that Kelly counseled GVEA Board against negotiating or agreeing to any HCCP settlement plan until he derailed the HEC proposal and put the fix in with the administration who would do his bidding.

The second reason for urgency is the administration wants a deal closed by the State of the State which is scheduled to be given by Governor Palin on January 20.

This will give her something to offer as an accomplishment since her administration has done very little in the last twelve months.

AGIA, ethics reform, increasing oil taxes...she claimed credit for all of those during last years state of the state. In fact one source told me yesterday that in this year's accomplishments sent out to employees, the administration listed the Santa visits to rural Alaska as an accomplishment.

Then there is our dear friend Tom Irwin, who was fomerly a public relations executive at GVEA after he dropped out of the Murkowski administration.

So that makes three Fairbanks neighbors and former GVEA executives that quite possibly have a hand in handing over a $300 million state asset to their former employer for a reported $50 million, minus the start up costs.

But wait, according to my sources there is more. The HCCP will be transferred to a new entity controlled by GVEA, but GVEA will not provide any guarantee of the $50 million debt. How’s that for bankruptcy protection and leaving the creditor totally exposed?



From what I understand the deal is done and AIDEA is only waiting for its next board meeting to approve the giveaway of the Heally Clean Coal Plant.

According to the AIDEA website, their next board meeting is January 15, 2009.

To read the AIDEA press release from 2005 regarding the filing of a law suit against GVEA as well as a detailed time line of the Healy Clean Coal Plant history, click on link:
http://www.aidea.org/PDF%20files/HCCP/AIDEA%20sues%20GVEA%20over%20HCCP.pdf

Politics and the Pipeline


"Even in my own energy producing state, we have hundreds of trillions of cubic feet of clean green natural gas, and we're building the nearly forty billion dollar natural gas pipeline, which is North America's largest and most expensive infrastructure project."
Governor Sarah Palin - Vice Presidential Debate - 10/2/08

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AP INVESTIGATION: Palin's Pipeline Terms Netted 1 Viable Bid, From Firm With Inside Ties

AP INVESTIGATION: Palin's Pipeline Terms Netted 1 Viable Bid, From Firm With Inside Ties

TIES THAT BIND

Palin's team was led by Marty Rutherford, a widely respected energy specialist who entered the upper levels of state government nearly 20 years ago. Rutherford solidified her status when, in 2005, she joined an exodus of Department of Natural Resources staff who felt Murkowski was selling out to the oil giants.

What the Palin administration didn't tell legislators _ and neglected to mention in its announcement of Rutherford's appointment _ was that in 2003, Rutherford left public service and worked for 10 months at the Anchorage-based Jade North lobbying firm. There she did $40,200 worth of work for Foothills Pipe Lines Alaska, Inc., a subsidiary of TransCanada.

Foothills Pipe Lines Alaska Inc. paid Rutherford for expertise on topics including state legislation and funding related to gas commercialization, according to her 2003 lobbyist registration statement.

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Sarah, Oil and Gas Expert?

Sarah Palin, energy expert?

Remember those times in college when instead of doing the reading for your class the next day, you went out partying with your friends? And remember how when your professor asked you about the material you didn't read, you stammered, and hemmed and hawed, and finally just said whatever came to your mind, hoping beyond hope that it was at least mildly coherent?

Apparently, six colleges later, Sarah Palin does too.

At a town hall on Wednesday night, Palin was asked how she would keep domestically produced oil and coal in the U.S. Here's her answer:


Of course, it's a fungible commodity and they don't flag, you know, the molecules, where it's going and where it's not. But in the sense of the Congress today, they know that there are very, very hungry domestic markets that need that oil first. So, I believe that what Congress is going to do, also, is not to allow the export bans to such a degree that it's Americans who get stuck holding the bag without the energy source that is produced here, pumped here. It's got to flow into our domestic markets first.

One courageous blogger, Hilzoy at Obsidian Wings, attempted to decipher Palin's response. Hilzoy thinks, with good reason, that Palin might have been suggesting a ban on oil exports.

That seems like a bad idea.

While Canada and Mexico are the two largest importers of U.S. crude oil and petroleum products, they're also our two largest suppliers. It's probably not smart to risk a trade war with them.

So perhaps John McCain overstated the case just a bit when he said that his running mate "knows more about energy than probably anyone else in the United States of America."




― Vincent Rossmeier

Congressional craziness

Congressional craziness keeps United States in much hot water

WE KEEP LOOKING for an expert to explain why the economy is such a mess, but haven't seen anything thoughtful and comprehensive yet. So we'll offer our own. At least two big problems can be blamed in large part on foolish government decisions.

Why are energy costs so high, triggering inflation throughout the marketplace? Why, indeed, since the United States has huge untapped energy resources in oil, gas, coal and tremendous potential in nuclear energy. Then there are renewable sources like hydroelectric, wind and moving water energy.

Some of the problems are in developing technologies, but the nation's vast oil, gas and coal resources are largely off limits to exploration and production because Congress (with a little help from presidents like Bill Clinton) made them that way.

That makes the nation dependent on foreign sources, especially the Middle East, which is now an economic lifeline and must be defended with the lives of young soldiers and the fortunes of average taxpayers.

Many politicians have sold their souls to environmental activists and fight to block oil and gas drilling and coal mining within and around the country's borders. When the subject comes up of drilling in ANWR, a huge oil and gas reservoir, critics argue that it will take 10 years to tap ANWR. "That won't help today," they say. But legislation opening ANWR was passed by Congress in 1995, more than 13 years ago. The field could easily have been in production by now.

And why does it take 10 years to get a new field into production? Mostly government regulation and red tape. It's impossible to believe that process couldn't be speeded up and due consideration still given to environmental protection and public opinion.

Then there are the stock market gyrations triggered by a collapse in the mortgage lending field. Why did that happen? Because Congress mandated that poor people should be able to buy houses whether they could afford them or not. And the rules were loosened enough that liar's loans allowed even middle class people to buy larger and better houses than they could really afford if they wanted to bet that their income was going to go up later on.

Those who sold mortgages to people who couldn't afford the payments or were at risk of defaulting made their money on the paperwork. Afterward they laid off the loans on larger lenders who tried to make their money by buying mortgage paper in large amounts. It should be no surprise that eventually the system collapsed.

These things are all craziness, folks. They just should not be. The United States could be a wise shepherd for its natural resources and still extract them in a timely fashion without damaging the environment. Doing so would create millions of jobs as well as provide the nation with major sources of energy on its own soil.

America needs reform, all right. Most of these problems stem from congressional idiocy. How you fix that is a difficult question. We don't have the answer, just the question.
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Palin requests a conference call with oil executives

Governor Sarah Palin has requested a conference call this week with the CEO's of the major oil companies playing a role in the potential development of Alaska's natural gas pipeline.

The requested participants include Tony Hayward from BP, James Mulva from ConocoPhillips, Rex Tillerson from Exxon along with others. According to my source, no one knows exactly what the purpose of the call is, but some have never the less speculated.

Last week in her address to the nation, Palin stepped far over the line of truthiness (thanks Steven Colbert) when she told the country, "I fought to bring about the largest private-sector infrastructure project in North American history. And when that deal was struck, we began a nearly forty billion dollar natural gas pipeline to help lead America to energy independence."

Nothing could be further from the truth.

In fact the state has done little more to move the gas pipeline forward over the last twenty months than to grant a Canadian company $500 million to push paperwork with no guarantee a pipeline will be built.

Anchorage Daily News reporter Wesley Loy reported last month;

Palin said in her press conference that the state never before had commitments to build this line. Now we do. That's incorrect.

TransCanada has not promised to actually build the gas line, one of the state's grandest and most frustrated economic development dreams.

The state license, awarded under the Alaska Gasline Inducement Act, or AGIA, which the Legislature passed at Palin's request last year, is not a construction contract and does not guarantee a pipeline will be built."

Since becoming Alaska's governor in December of 2006, Palin's administration has had a very combative relationship with the oil & gas industry in Alaska and has ignored any attempts to communicate with them on development issues.

When the Alaska Gasline Inducement Act (AGIA) was introduced and passed by the legislature in 2007, the administration refused to entertain suggestions from the producers to make the process more commercially viable. At the end of the day the state had crafted a proposal that ignored all legal and fiscal realities.

So instead of negotiating with the producers, the administration said they'd rely on public and share holder pressure to force three of the largest oil companies in the world to commit to paying for the most expensive privately financed project in the history of the United States.

Even United State Senator Ted Stevens raised serious concerns about the process back in March saying; "financing terms won't be set by the legislature, the governor or the Congress. They're going to be set by the people who manage the money."

Today, the state has awarded a $500 million inducement and exclusive rights to TransCanada, while their CEO is on record as saying that they cannot order one piece of steel pipe without first gaining the financial support from the oil companies. "Nothing goes ahead unless Exxon is happy with it," CEO Hal Kvisle told the Toronto Globe and Mail in August.

So what could the agenda be on this requested phone call by Governor Palin?


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