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SMMPA seeks damages for alleged wind-turbine problems

A power agency claims it has suffered damages exceeding $7 million stemming from defects in four wind-energy generation turbines in the western Minnesota.

Southern Minnesota Municipal Power Agency, based in Rochester, is asking a district court judge to order the defendant, Vestas American Wind Technology Inc. of California to resolve the dispute through arbitration.

Gerald Duffy of Minneapolis, attorney for SMMPA, filed the complaint Thursday in Olmsted District Court.

According to court documents, Duffy says the Turbine Supply and Installation Agreement provides for binding arbitration in disputes. He said SMMPA owns four wind-energy generation turbines. Two are around Fairmont, and two are around Redwood Falls. The turbines were sold to Vestas by NEG Micon USA Inc. The turbine agreement contains a provision mandating arbitration of disputes.

SMMPA alleges that the turbines have design and manufacturing defects. Duffy said Vestas has refused to address the defects. As a result, he says, SMMPA has lost revenue from down-time caused by system failures. In addition, the defects have accelerated the depreciation of the turbines and their components, there has been a loss of future revenue from the down-time, there have been increased costs, and there has damage to crops and long-term damage to cropland from ground compression due to crane movement.

The complaint said SMMPA demanded arbitration on Nov. 1. On Nov. 14, James Filiault, corporate counsel for Vestas, responded by saying SMMPA’s demand for arbitration was a breach of the dispute-resolution provisions of the agreement. He said SMMPA cannot circumvent the requirement for negotiation of disputes set forth in the agreement.

He said they also disagree with SMMPA’s proposal that Richard Solum serve as the arbitrator.

Filiault asked that SMMPA “promptly withdraw its demand for arbitration.” That led to SMMPA filing the complaint in district court for arbitration.

No hearing date has been set.

By Janice Gregorson

Post-Bulletin

10 December 2007