Who is Nevada Hydro?
Action you can take to help stop LEAPS
Why LEAPS is not economically viable
What credible persons and agencies say
Lies, Inaccuracies, and Misleading Statements
THE NEVADA HYDRO COMPANY, INC. February 12. 2007
In the State of California, The Hydro Company, Inc. does business as The Nevada Hydro Company, Inc. (Nevada Hydro). This later entity was formed in California on June 13, 1997 - just months after The Hydro Company was incorporated in the State of Nevada on February 21, 1997.
Relevant information on the formation of both of these entities can be found on the web sites for the Secretaries of State for both California and Nevada.
It is noteworthy that Nevada Hydro was formed in 1997, the same year that a Development Agreement for the LEAPS Project was signed between The Hydro Company and the Elsinore Valley Municipal Water District (EVMWD). This indicates that Nevada Hydro did not have substantial business experience before becoming involved with the LEAPS Project.
Based on the information provided by the Nevada Secretary of State, The Hydro Company has 25,000 shares of stock with $0.00 par value.
The following is relevant information on Nevada Hydro’s officers and the Company’s three known shareholders:
(1) Peter Lewandoski is President and a shareholder. He lives in Mission Viejo, CA.
(2) Rexford Wait is Treasurer (and Vice President) and a shareholder. He lives in Vista, CA.
(3) Arnold B. Podgorsky was a shareholder and believed to be a partner in Nevada Hydro. He is a lawyer who lives in Washington, DC and works for the law firm of Wright & Talisman. On March 11, 2008, Mr. Podgorsky advised StopLEAPS that he gave up his ownership in Nevada Hydro in August, 2002, Since Mr. Podgorsky declined to provide current information on the ownership of Nevada Hydro, his position may now be held by a family member or some unrelated third party. See the footnote at the end of this article for further details.
Literature is available on this law firm's web site. There, Wright & Talisman is promoted as "one of the strongest FERC boutiques in the market". Attempts to gain information about the finances and credit worthiness of Nevada Hydro through normal channels, such the Dunn & Bradstreet reports, have yielded no information. Investigations about this Company made on the Internet have yielded limited information that suggests that Nevada Hydro has no products or businesses other than those related to the LEAPS Project.
Nevertheless, if the LEAPS Project moves forward to completion, the three shareholders of Nevada Hydro stand to reap windfall profits of approximately $85 million. This number has been calculated based on the rate request filing made by Nevada Hydro to FERC in a letter dated November 29, 2005.
Although FERC has not yet responded to this letter, the following shows how this $85 million profit has been calculated.
The terms requested by Nevada Hydro are summarized on page 5 of their 11/29/05 rate request:
To summarize, TNHC [The Nevada Hydro Company] is requesting the following for both the TE/VS Interconnection [a stand alone power line] and the LEAPS project as Commission jurisdictional transmission assets:
- Initial post-tax return on equity of 14.5%.[annually]
- An assumed or target 50/50 capital structure for at least the first three years of service. [i.e. a 50% - 50% split of the total return on equity between Nevada Hydro and their investors]
- A three year moratorium. [during which the 14.5% return on equity can’t be changed]
According to the Final Environmental Impact Statement prepared by FERC, the LEAPS Project has a projected cost of about $1.3 billion. This amount is expected to be financed by 30% equity investment and 70% debt (secured from financial institutions). Thus, the total equity would be:
Total Equity = 0.30 x ($1.3 billion) = $390 million.
The annual rate of return on this investment at 14.5% would be:
Annual rate of return = 0.145 x ($390 million) = $56.55 per year
Assuming that Nevada Hydro receives 50% of this amount over a period of 3 years, results in a profit of:
Profit for Nevada Hydro = 0.50 x (3 years) x ($56.55 per year) =$84.8 million.
This may be rounded off to a profit for Nevada Hydro of $85 million.
Prepared by Douglas Pinnow
February 12, 2007
Footnote containing e-mails sent on 3/11/08 from Arnold Podgorsky to Doug Pinnow and Doug’s response.
Initial e-mail:
From: "ARNOLD PODGORSKY" <podgorsky@wrightlaw.com>
To: <doug.pinnow@ca.rr.com>
Sent: Tuesday, March 11, 2008 10:32 AM
Subject: LEAPS
Dear Mr. Pinnow,
As you know, your Stop LEAPS internet site states that I am "a shareholder and believed to be a partner in Nevada Hydro," and goes on to refer to my law firm.
I and the the firm serve as legal counsel to The Nevada Hydro Company in certain matters. Although I held an interest in that company many years ago, I am neither a shareholder nor a partner in the company, and hold no other interest in it. Therefore, your additional statement that I stand to participate in profit is erroneous.
In the interest of accuracy, kindly correct your errors.
Regards,
Arnie Podgorsky
Wright & Talisman, P.C.
1200 G Street, N.W., Suite 600
Washington, DC 20005
Office: 202-393-1200
Fax: 202-393-1240
Mobile: 703-217-1827
Doug Pinnow’s response:
Hi Mr. Podgorsky,
Thank you for your e-mail.
I would like to have the information on StopLEAPS to be as factual as possible. Since I know of no way to corroborate the information that you sent to me, I would propose to ask the webmaster for StopLEAPS web site to publish your complete e-mail as a footnote to the article "Who is Nevada Hydro?". The text of the article would include the statement "Mr. Podgorsky has recently advised StopLEAPS that he no longer has any ownership or other beneficial interest in The Nevada Hydro Company (see footnote)."
Would this be satisfactory to you?
If you have any other information on the current ownership of Nevada Hydro that you can share with me, that would be greatly appreciated.
Regards,
Doug Pinnow
Arnold Podgorsky’s reply:
Dear Mr. Pinnow,
As the publisher it is your burden to assure that the facts you state are correct, particularly after being informed of falsity. It is not my burden to provide corroborating information. You should delete references to me and my law firm in any discussion about ownership and sharing of alleged profits, as all such statements are false. I have had no ownership interest in The Nevada Hydro Company since August 2002. We are legal counsel only, and, of course, have no objection to being referred to in that capacity.
Inclusion of an assertion of falsity in a footnote to your false statement is insufficient. You are on notice that your statements are false. Respectfully, you should take prudent care to correct your text, which lacks any evidentiary basis. Stated differently, because I know the facts, I also have certainty that you cannot back up your published statement.
Kindly reconsider your response. Thanks for your anticipated courtesy.
Regards,
Arnie Podgorsky