Jay Precourt, donated $50 million, and university trustee and managing partner of Farallon Capital Management Thomas Steyer and spouse Kat Taylor gave $40 million, and Douglas Kimmelman, senior partner of Energy Capital Partners, Michael Ruffatto, president of North American Power Group Ltd., and the Schmidt Family Foundation combined to make a gift of $10 million $50 million + $40 million + $10 million Â Poughkeepsie, NY, Raymond A. Rich has bequeathed a 60-acre estate valued at approximately $75-million to Marist College along with a $10 million cash gift, $75 million + $10 million Â Chicago, IL, Loyola University Chicago historic gift from John Cuneo, Jr., his wife, Herta, and the Cuneo Foundation.
Michael J. Ruffatto established North American Power Group, Ltd. (NAPG) in Englewood, Colorado in 1992.Mike Ruffatto has over 30 years in the gas, oil, and energy trading and power generation industries, including both regulated and unregulated businesses.
He served as a Board of Trustees member of the Western Electricity Coordinating Council from 1999 to 2002.
North American Power Group founder and president Michael J. Ruffatto, an established Denver energy attorney, said he had a better idea.
In his pitch to investors and Wyoming officials, Ruffatto proposed building a large power plant smack in the center of Wyoming coal country.
"Waste coal" from the nearby mines could be gathered just for the cost of picking it up, Ruffatto said, trucked to the Two Elk plant and burned to produce power for the American southwest.
The lower BTU rate was okay because Two Elk would not have to pay rail freight costs.
he high ash content, he said, would be handled with the state's first ash storage and disposal facility, also to be located on the Two Elk site.
To finance Two Elk's construction, Ruffatto petitioned then-governor Jim Geringer in 1997 for Industrial Development Revenue Bonds.
But Ruffatto and his bond attorneys successfully convinced the state that the Two Elk plant qualified for a much greater dollar amount under an exception in the federal Internal Revenue Code for "solid waste disposal."
In a November 2007 sworn affidavit for the Department of Environmental Quality, Ruffatto listed electricity generation as a secondary role for the plant.
"Two Elk will recycle and dispose of non-commercial or waste coal exposed during the mining process from adjacent surface mines, also producing electricity in the process," he wrote.
Over the years, Ruffatto and other Two Elk representatives have listed a number of reasons for the delay in construction.
One of the companies expected to partner with the North American Power Group in the project, for example, got caught in the backwash of the Enron collapse in Houston.
Two Elk, they said, was also having trouble getting access to electricity transmission lines leading out of the Powder River basin.
An initial 2004 transmission agreement with PacifiCorp, the Portland, Oregon-based utility, fell apart.
Two Elk's deposit of $506,000 was refunded, but not until Ruffatto had used a cancelled check for the deposit to seek more bonding authority from Gov.
After working briefly for another Phoenix law firm - Powers, Ehrenreich & Kurn - Ruffatto took a job with a private crude oil and petroleum product trading firm, Crysen Corp., which was headquartered in Santa Ana, California.
Ruffatto and his young family - he married Phoenix grade school teacher Joan Burrows Smith in 1978 - moved there in 1982.
At Crysen, Ruffatto, describing his role as "problem solving," concentrated on complicated crude oil transactions.
Ruffatto developed the Tri-Gen joint venture into a significant gas trading business with offices in Orange, California, and Denver.
Also in 1988, Ruffatto bought out Edgington's share of the Tri-Gen joint venture and immediately sold 51 percent of the company to North Canadian Oils, Ltd., the Calgary energy arm of Canadian business tycoons Peter and Edward Bronfman.
The Bronfmans were looking for an outlet for Alberta natural gas and they asked Ruffatto to run their California shop.
But in January 1990 the Bronfman brothers discharged Ruffatto, triggering a minority stock buy-out provision under his employment agreement.
In his resignation announcement with an energy trade magazine, Ruffatto said that "in three short years" since he formed Tri-Gen, the company had reached $75 million in sales and had $20 million in assets.Mike Ruffatto
The Bronfmans disagreed with the amount Ruffatto demanded for his 49 percent share of the company, and the parties went into arbitration, reaching a settlement in late 1990 that made Ruffatto, who had been in the energy business a little over a decade, a millionaire many times over.
After moving to Colorado with his family - wife Joan and their two children - Ruffatto began to look for a way to invest the fortune he had made in the Tri-Gen buy out.
In late 1992 he found it.
By carefully following the affairs of two financially troubled companies, Ultrasystems Inc., a defense contractor and energy company in Irvine, California, and Hadson Corp., an Oklahoma energy company, Ruffatto saw his opportunity in Oklahoma City bankruptcy court.
Ruffatto, who from his days with Crysen Corp. had shown an interest in cogeneration and alternative power sources, had been carefully tracking the progress of the four Ultrasystems-Hadson power plants.
Badly overextended and deeply in debt, Hadson Corp. in 1992 filed for reorganization under bankruptcy in Oklahoma City federal court.
Ruffatto then made his move.
It was by all accounts a brilliant business maneuver.
According to federal bankruptcy records, Ruffatto paid only $1.7 million for Hadson's 6 percent share of the plants.
He then moved quickly to buy out Chrysler Capital and Pitney Bowes, both of which, in his words, "wanted to exit this area of business" and were ready to make favorable deals for their shares.
That was the case in the early part of the 1990s when - like farmers paid not to grow crops - Mike Ruffatto was paid not to operate two of his newly acquired power plants.
For what was already a great deal, it was icing on the cake.
In late 1992 Ruffatto used the money he made in the North Canadian Oils arbitration settlement, the money he leveraged from the purchase of the four California power plants out of bankruptcy court, and the money he was receiving for idling his two plants, to create his new Denver-based company, North American Power Group Ltd.
Corona del Mar beachfront satellite view (click to enlarge)
Mike Ruffatto bought this waterfront home at 105 Bayside Place, Corona del Mar, California, in 2004 for $7.8 million.
He sold it in 2009 to Los Angeles Angels owner Arte Moreno for $12.1 million. (click to enlarge)
And it is no wonder that, given all his recent business victories, Ruffatto was brimming with confidence.
He and his wife had bought an enormous new home and stable in the most exclusive neighborhood of suburban Denver's Cherry Hills Village.
They had a huge motor yacht moored in San Diego Harbor, and they were negotiating to buy a bay-front home with its own pier in Corona del Mar. (After his wife died in 2007, Ruffatto sold the waterfront house to Los Angeles Angels owner Arte Moreno for $12.1 million, about what Ruffatto had paid for his half of the four California power plants.)
Already a success by most measures, he was now ready to turn it into something bigger in the Rocky Mountain region, where he saw potential for small, aggressive, privately held energy companies like his new venture, North American Power Group.
As he told the Colorado Public Utilities Commission in testimony in 2000:
But when North American failed to win the final contract, instead of swallowing the bad news and moving on, Ruffatto decided to make a public fight of it.
In a rare investigative hearing before the Public Utilities Commission, he accused PSCO of rigging the bids to favor companies with which it already had a relationship.
Yet, even if he won the battle, Ruffatto risked alienating his biggest potential customer.
"Mike lost out and felt that he shouldn't have lost," recalled Muller, who was then director of the Colorado Independent Power Producers Association, which included NAPG as one of its members.
"Mike is a strong-minded guy and I think he felt that with his successes in California - he made some pretty good money on some plants out there - that he wasn't going to get pushed around.
In words of Administrative Law Judge Arthur G. Staliwe, who oversaw the process, Ruffatto felt that NAPG had been "ambushed" by the utility when it ordered changes in the original proposal.
Ruffatto testified that he was deeply offended by the PSCO accusations.
"Public Service has made many uncomplimentary remarks about NAPG's ability to deliver the projects," Ruffatto said.
The PUC ruled against Ruffatto and NAPG.
Despite the setback, Ruffatto and NAPG continued to bid on projects for PSCO contracts.
In 2006, Ruffatto even went so far as to issue a press release announcing a $1.2-billion power plant and transmission project tailored for the PSCO parent company, Xcel Energy, in Wyoming.
Whether he intended it or not, the release gave the impression that the Xcel plant was practically a done deal.
"We are excited by the opportunity to serve Colorado's growing energy needs with electricity generated from clean coal technologies in Wyoming's Powder River Basin," Ruffatto said in the PR Newswire release.
But that ambitious proposal, like others, was almost immediately rejected by Xcel, which issued a press release stating that the company planned to focus power development in Colorado.
In fact, Ruffatto and his company have never won a contract from Xcel or PSCO, the biggest utility in their home state.
"I feel that Mike probably shot himself in the foot earlier by being so shrill in the battle before the PUC," said Muller.
But some of the charges leveled at NAPG before the Colorado PUC - that the company consistently missed deadlines, that it was under-financed, that it skewed facts and misrepresented negotiations, that it failed to obtain the necessary permitting - were the same ones that would haunt Ruffatto and his company for the next 15 years in Wyoming in the Two Elk project, and which would lead to the suspension of the $10 million in stimulus grants he received from the U.S. Department of Energy.
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