Who owns the Big Blue Wind Farm currently being built in Jo Daviess Township?
It’s a legal matter a Faribault County District Court or U.S. District Court judge will be asked to settle.
Fate of the project may hinge on the court’s ruling and a $22 million federal stimulus grant also is at stake.
At issue is whether Fagen Inc. and Midwest Ethanol Transport have 100 percent control of the wind farm, or if Exergy Development Group of Idaho, the original developer, still has some say.
On Thursday, a hearing was scheduled in Faribault County District Court on Fagen’s motion seeking a temporary restraining order or a preliminary injunction against Exergy officials.
But, attorneys for the defendants filed a motion to have the case heard in federal court in Minneapolis because it involves “diversity of citizenship.”
Fagen and Midwest officials are from Minnesota, while one Exergy official lives in Montana and another in Idaho.
The lawsuit names Exergy owner James Carkulis and his top executive, Elizabeth Woolstenhulme.
In court papers filed this month, Fagen claims the uncertainty over ownership is “holding the project hostage.”
Fagen attorneys are asking for Exergy to stop portraying itself as owners of the 36-megawatt energy project.
According to court papers, once construction was under way Fagen was forced to step in and loan Exergy more than $11 million because they were unable to obtain financing.
According to court papers, in February Exergy transferred 99 percent ownership of the project to the Granite Falls, Minn.-based contractor.
In exchange, the two parties signed an agreement that if the loan was not repaid by the end of June 2012, Fagen would assume 100 percent ownership of the Big Blue project.
Fagen also had some additional costs, according to court documents.
The company reportedly paid $14 million on the wind turbines that are expected to cost more than $37 million.
The complaint says when Fagen took over the project at the end of August, the company had to pay numerous bills and invoices.
Also, in the past few weeks Fagen has spent more than $15 million.
Because of the dispute, Northern States Power (NSP) may be having second thoughts about purchasing power from Big Blue.
“Continual confusion caused by Exergy threatens completion of the project by Dec. 31, 2012,” says a court complaint.
If the wind turbines aren’t fully operating by the end of the year, says the complaint, Big Blue will lose the stimulus money.
Court papers say NSP has acknowledged receiving “competing monthly project updates from both Exergy and Fagen.”
When completed, the Big Blue Wind Farm is expected to produce enough power for nearly 20,000 homes a year and create 60 jobs locally.
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