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• America Needs Jobs
• America need a NEW Third Party to get Government working for “ALL The People, ALL the Time”
• The USA still has NO Energy Policy nor Long Term Strategy
• Orders for new nuclear units have stalled

Given the events toward the end of 2011, we know many of you are NOT weathering the economic slowdown and continue to struggle. As such we have held out billing rates in check for 2011. The country needs to get our CITIZENS back to work and we need to create a new “Third Party”, the American Party and SEND BOTH PARTIES IN WASHINGTON, D.C. a clear message, REPRESENT us and the Country not your OWN self-interests. Gridlock and the special interests have all but brought America to a standstill.

Our founding fathers would be ashamed at the political posturing and infighting going on in Washington. D.C. One solution, which seems counter intuitive, is for the Federal Reserve to allow interest rates to actually INCREASE. This would HELP our seniors and those on fixed incomes, and separate the “real profitable” going concerns from the rest. Going into 2012 and possibly beyond, though there have been some intermittent upticks in the leading economic indicators, a sustained recovery appears nowhere on the horizon. So continue to hunker down and stay “Mean-and-Lean” in order to survive.

One way to move forward and build for our future is to CREATE a RATIONAL, well thought out NATIONAL ENERGY POLICY (NEP). The NEP must balance RENEWABLE Energy’s role and technologies with our current load based technology and transmission grid limitations. Our NATIONAL SECURITY must utilize and expand our NUCLEAR know how. And stop sending our money by the billions overseas in the way of OIL purchases. Our transmission systems MUST be overhauled, and our tax and incentives must cover at least a decade long period to allow the capital markets time to tool up and support our ability to transition to the FUTURE. Great book to read on this topic is The End of Energy by Michael J. Graetz.

New Nuclear Unit orders have stalled but one company, Fluor, my former employer, is making a bold leap by buying a small nuclear company called NuScale Power.

• Mergers and Acquisitions (M&A) Business Front

We are and will be following the Duke Energy/Progress Energy merger closely through the news and other sources. This looks to be approved and will be finalized possibly later this year or early 2012. Look at the news on Duke Energy and Progress - a good fit and logical combination but some major issues to address, such as market power in the Carolina’s (North and South) and the mixed performance of both Companies’ commercial nuclear fleets, differing approaches toward new nuclear units, and the management styles of the two companies have to be integrated. The New Company will be a POWERHOUSE.

HGP has performed “Over 154 comprehensive due diligence reviews” to support mergers and/or acquisitions (M&A). Our work ranges from individual large projects to entire Corporations and subsidiary companies. It is even more CRITICAL and PRUDENTLY NECESSARY in these economic times. Risk identification and management is a key area that most due diligence efforts fall woefully short on. The Board of Directors (BOD) needs to demand that a clear and concise list of the material risks be prepared, first to review the transaction and oversee the transition and verify that the deal results in what they were told. The BOD also needs to see that the material risks are monitored and mitigated if the deal is approved to proceed. Many BOD’s do not even know the material risk of an acquisition or merger. 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. Just look at BP with an Emergency Plan to put into action.

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.

• Some Observations for 2012

1- The estimated capital cost for the new generation of commercial nuclear plants has continued to INCREASE- SURPRISED, not really! We are down to only a handful of “BUILDABLE” new nukes that are still underway. The USA Government Loan Guarantees have been too few and too SLOW to have any real impact on the national level and only Georgia and South Carolina are beginning to see any new jobs. The other so called New Nuclear projects are looking for partners and ways to justify the risk to the stakeholders. Most current Commercial Nuclear Plant Boards and Senior Officers as well as their Chief Nuclear Officers (CNO’s) do not have ANY experience in Engineering, Procurement , or Construction (EPC), not to mention Startup and Commissioning for nuclear plants. They do not know what to look for, how to control nor make the design and procurement processes more efficient and cost effective, nor how to manage large scale construction projects, let alone start up a new plant. Thus the risk to their Company investing in a new nuclear plant is even greater. The EPC firms and the OEM vendors have NOT been able to bring down the cost or the complexity and the NRC does not seem to understand the new I&C systems using digital controls? Thus many uncertainties continue. New small modular nuclear plants, as funded and supported by Microsoft’s billionaire Founder Bill Gates, hold much promise, so much so that even Hawaii is entertaining changing its laws to allow one or more units.

Article: Bill Gates-Backed TerraPower Gets $35 million; Has Plans For Gigawatt-Sized Nuclear Reactors And Small, Modular Reactors

Article: Fluor buys NuScale Power, enters modular reactor market

2- HGP has several lifecycle cost saving strategies and other techniques to make new commercial nuclear stations much 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 plant (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.

Article: Nuclear Energy Industry Continued To Set Safety Standard in 2009, WANO Indicators Confirm

Stats: WANO 2009 Performance Indicators for the United States

3- Renewable Energy wind projects have slowly ground to a halt without a clear signal on the Production tax credit from Washington D.C.

Article: New study: Wind energy success story at risk with 54,000 American jobs in the balance

4-Given the continued current state of the USA, European and world wide economies, many of America’s businesses are continuing to hold off hiring new employees or expanding. HGP has made adjustments to weather this downturn and continues to be debt free to allow us to hold our costs down to support our current and future client base. We are now offering our clients a significant loyalty discount on new assignments to keep our staff contributing toward the recovery. Ask about offer NY2012 when you contact us.

• 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 or me directly at: FGiffels@HGP-Inc.com

We wish you the Best of Success!

Fred W. Giffels, CEO

Higher Goals Performed

Dedicated to the Pursuit of Our Client's Success