SAINT PAUL – After spending more than $15 million over an unprecedented four-plus-year permitting process, the New Era wind project near Zumbrota might soon be back at square one.
Xcel Energy filed paperwork May 24 with the Minnesota Public Utilities Commission that seeks to terminate its power purchase agreement with the 78-megawatt wind project. If New Era declines to accept that action, Xcel is prepared to take the issue to court.
Jim Alders, Xcel’s director of regulatory affairs, said Thursday that New Era has “failed to meet the requirements” of the 2010 contract, which required PUC approval. Attempts since December to cure the defaults have failed, prompting the recent action.
“We gave them until recently to cure those deficiencies, and they have not been able to do so,” Alders said. “This is a pretty unique project that has met lots of difficulty. I can’t remember another circumstance like this one.”
New Era, which did not return phone calls, had sought to cure the defaults by assigning the purchase agreement to another wind project. Xcel formally declined that option on April 12. Alders said he hasn’t heard from New Era in a long time, making resolution unlikely.
The court will likely be asked to rule on delay damages as well, but Alders declined to address that issue on Thursday.
“Right now, our focus is just on going to court and asking for the right to terminate,” he said.
The power purchase agreement is not the only roadblock facing New Era, which has changed owners twice since first seeking state permits in 2008; Peter Mastic is the current owner and developer, having purchased it from Texas billionaire T. Boone Pickens in 2012.
The PUC decided in February to re-examine the certificate of need for the 48-turbine project due to lingering questions and concerns that include ownership issues, protection for bats and birds, and its status as a community-based wind development (C-BED). That vote reopens a decision made more than two years ago.
A second hearing before an administrative law judge might also be required, extending the process at least another six months.
The PUC was to consider the New Era project on May 2 but it was pulled from the agenda. It’s expected to be heard June 20, though that agenda won’t be finalized until June 10.
Timing of the project remains vital. New Era already missed the federal cash grant program, Section 1603, that expired after 2011, which would have provided more than $50 million up front. And the federal production tax credit could generate tens of millions if the project is operational by the end of 2014.
New Era officials have said the project isn’t financially viable without federal assistance, but Mastic wasn’t optimistic in his last PUC filing, made April 17.
“… this project has a more extensive record than any other wind project in the State of Minnesota. At this point … New Era has no confidence that due process for this project will ever end.”