Marv and Marlys Jensen just wanted to supplement their income with a little energy-and-money-producing wind turbine on their farm in rural Kensington.
But they ended up taking out loans to pay more than $245,000 to an Excelsior-based company called Renewable Energy SD for a 160-foot wind tower that currently produces nothing.
Their first wind turbine, delivered in August 2010, didn’t work, and they were told they had to trade it in and buy a second, more expensive one, they said. That one was supposed to be delivered in January 2012.
A year later, they’re still waiting.
“What I got is a $200,000 deer stand,” said Marv Jensen, 72.
The Jensens were one of several farm couples who told similar stories of broken promises at a news conference conducted by Minnesota Attorney General Lori Swanson Friday, Jan. 25.
Swanson sued Renewable Energy SD on Friday in Hennepin County District Court, charging that it bilked 15 farm couples out of hundreds of thousands of dollars apiece.
The company, which was formed in 2009 by Shawn Dooling, used federal stimulus money that was supposed to help the country out of the recession to entice farmers to buy the turbines, the suit alleges.
And instead of paying back the Jensens and similarly unhappy customers, the company appears to have spent hundreds of thousands of dollars on luxury supercars, the complaint said.
Those cars include a 2009 Lamborghini worth $297,700, two 2011 Bentleys worth about $180,000 each, a 2010 Ferrari worth $219,000 and two 2011 Audis, worth $183,700 and $72,900, according to the complaint.
Dooling lives in a house in Shorewood on Lake Minnetonka with an assessed value of $1.6 million, according to Hennepin County records.
Renewable Energy said in a statement Friday that it was reviewing the allegations.
“RESD’s commitment is to its customers, and we will address any concerns that they may have,” it said. “RESD looks forward to having a meaningful discussion with the attorney general’s office so that we can continue to pursue our mission of making clean, renewable wind energy available throughout Minnesota and across the Upper Midwest.”
The company declined to comment further.
On its website, Renewable Energy SD says it has 150 projects operating in Minnesota, Iowa and Wisconsin – and satisfied customers.
Swanson said her office unsuccessfully tried to negotiate settlements for the farmers.
Her office will try to recoup some money for them but mostly wants to prevent Renewable Energy from engaging in more bad deals, Swanson said.
“These are expensive projects for farmers or couples, and we don’t want people making promises they cannot keep,” she said.
She said Renewable Energy, which is incorporated in South Dakota, failed to renew its license to operate in Minnesota after its certificate of authority lapsed in August. However, it continued to do business in Minnesota without proper registration.
According to the attorney general, Renewable Energy told farmers that their wind turbines would be eligible for a federal energy investment grant from the American Recovery and Reinvestment Act of 2009 that would take care of 30 percent of the cost of a project.
The remaining 70 percent would be paid off by selling the power they produced to local utilities, the farmers said they were told. Once the turbines were paid off, their owners would receive the revenue from electricity sales.
The company allegedly told farmers detailed projections of how much money could be derived from the turbines, which are rated to produce no more than 40 kilowatts of electricity. The amounts typically ranged from about $700 a month to about $1,300 a month, the attorney general said.
But the federal grants required the projects to be operating for five years after their completion, and the government can claw back the grants if the turbines don’t operate.
Harlan and Judy Jacobson of Ashby said they thought their $126,000 turbine would generate $800 a month, but after it was installed in December 2010, the generator didn’t work.
A second generator was installed, but the blades cracked. Renewable Energy never fixed it, the attorney general’s complaint said.
So Harlan Jacobson, 75, spent between $2,000 and $3,000 to get it to work, but it operates at far below the capacity promised. So it won’t come close to making the $800 a month he counted on to pay for itself, he said.
He called the experience “maddening.”
One unhappy turbine owner found the experience frightening.
Mark Schroeder of Elgin said he and his wife, Bonnie, were told a turbine could bring in $1,235 a month for his farm. He wanted it to power his barn, where he uses a large amount of electricity to dry his crops.
But the machine malfunctioned almost immediately after it was installed in May 2011, he said.
Renewable Energy shut down the turbine, took it down and then reinstalled it. But last February, the turbine started shaking and smoking.
“I heard this loud noise outside the door, like a helicopter was right over the house,” Schroeder said.
The 25-foot-long, 500-pound blades were spinning out of control, and when a gust of wind hit, a blade broke off and flew 300 feet into a field.
Renewable Energy also is having conflicts with the rural electric co-operatives that it wants to buy the power from its customers’ wind turbines.
The Minnesota Public Utilities Commission is investigating a complaint filed by the company against the rural co-ops, saying the co-operatives are trying to discourage its customers from using their turbines to produce electricity.
The co-ops are complaining that the turbines used by Renewable Energy produce more electricity than the 40 kilowatts allowed under the state’s net metering laws far too often.
The net metering law allows small energy producers like a single wind turbine to be reimbursed at market rates for electricity they produce, but only up to 40 kilowatts.
The commission has an ongoing investigation underway, PUC spokesman Dan Wolf said Friday.
The types of wind turbines belong to a classification called “small wind producers,” because they generate relatively little electricity. The company’s web site says it belongs to the state’s small wind producers’ association, Windustry, but Lisa Daniels, Windustry executive director, said that while her group is helping Renewable Energy SD build a case for the PUC for the turbines occasionally going over the 40-kilowatt limit, such as when there is a gust of wind, she knows little about the company itself.
She recalls farmers who came by the Windustry booth at the Minnesota State Fair this past summer asking for directions to Renewable Energy SD.
The farmers were unhappy, she said. “Clearly, something went wrong here,” she said.
|Wind Watch relies entirely
on User Funding