Greg Jaunich was accused of billing Xcel Energy up to $400,000 for electricity not produced.
Greg Jaunich, a longtime Minnesota wind-power entrepreneur, pleaded guilty Tuesday to mail fraud in connection with federal charges that he bilked Xcel Energy of up to $400,000 with false meter readings from a couple of mostly inactive turbines.
Jaunich’s plea was accepted by U.S. District Judge Paul Magnuson. Jaunich, 47, who will be sentenced by Magnuson at a later date, faces a maximum penalty of up to 20 years in prison.
Jaunich was the manager of Northern Alternative Energy-Shaokatan Power Partners, one of numerous projects he owned or ran through several entities in Lincoln County in the blustery southwest corner of Minnesota.
On Sept. 25, 2003, Jaunich received from a Shaokatan employee meter readings for power produced by Shaokatan’s wind turbines of 13,800 kilowatt hours and 6,200 kilowatt hours, according to the plea agreement. Jaunich instructed employees to bill Xcel for 1.84 million kilowatt hours, an amount that Jaunich knew was inaccurate. In fact, Jaunich knew that one of the turbines was not even up and operating some of the period.
The government charged that Jaunich continued to send inflated estimated bills to Xcel into 2004.
After he was charged in September, Jaunich said through his lawyers that he wouldn’t risk a 15-year career in the industry by cheating a power company, as well as the Minnesota Department of Commerce, which provides rebates to small wind projects. Jaunich said he was swamped with multiple projects and that administrative errors shouldn’t have been blown into a federal case.
His lawyer could not be reached for comment Tuesday.
At least one former employer and competitors tipped off investigators, according to court filings.
There also was bad blood in the neighborhood.
Locals blame Jaunich for violating the spirit of a 1990s law that was intended to exempt from property taxes small projects of up to 2 megawatts that are owned by local farmers and others.
In response to the Minnesota local-ownership law, Jaunich and investors erected more than 30 turbines in one project around 2000 that produced more than 30 megawatts. But the project was structured as 15 separate legal entities that would qualify for the state subsidy.
The Minnesota Legislature, at the behest of small competitors and the Commerce Department, passed legislation in 2003 that barred such corporate structures from getting the state subsidy. The law was dubbed the “Jaunich Amendment.”
By Neal St. Anthony
1 July 2008
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