MINNEAPOLIS – Xcel Energy has asked a court to allow the utility to pull the plug on a 20-year deal to buy power that’s never been generated from a proposed Goodhue County wind farm that may never be built after four years of nonstop controversy.
The power play comes just ahead of a potentially make-or-break state permitting hearing Thursday reopening the permitting process for the controversial New Era Wind Farm.
“We have been working with the project developer, New Era, to see if they could in some fashion cure the defaults or difficulties they’ve had,” said Jim Alders of Xcel Energy. “They’ve been unable to do that. We’ve finally reached a point where we think the project needs to be terminated.”
Xcel contends the project delay has forced the utility to revise its plans for meeting the state mandate for renewable energy generation. The development marks another hurdle for the proposed 48-turbine wind generation project, whose opponents appear increasingly confident a project that once seemed unstoppable may now never get off the ground.
“The AWA Goodhue/ New Era project is dead, this has been obvious for a while’” said Kristi Rosenquist of the Coalition for Sensible Siting. “It is unclear whether it was ever a viable project given the long list of problems that had never been resolved.”
The $180 million New Era Wind Farm in southeastern Minnesota was supposed to be up and generating 78 megawatts of wind power in 2011. Local opposition over the project’s footprint and impact on eagles and other wildlife, however, stymied progress every step of the way. The developers say $15 million has been spent to date to obtain state permits and satisfy other requirements. The original investment group led by Texas billionaire T. Boone Pickens sold the project to Peter Mastic of New Era Wind Farm in 2012.
Legal documents filed by Xcel Energy in Minnesota District Court in Minneapolis on June 14 allege that New Era failed to meet several conditions of a power purchasing agreement with the utility’s Northern States Power unit. The utility acknowledges in the court filing that New Era disputes “the magnitude and quality of its contract breaches and has called into question NSP’s right to terminate the Agreements”.
Xcel alleges that New Era failed to:
• Advance construction of the project in the required timeframes or provide a plan to further construction
• Establish a security fund to protect NSP in the event of project delays
• Pay liquidated delay damages in the amounts and timeframes stipulated
• Obtain NSP’s prior written approval for the change in control/ownership
“The purpose for this action will be to resolve any questions over whether the magnitude and quality of New Era’s defaults are sufficient to justify termination for default,” Alders wrote in a June 17 letter to the Minnesota Public Utilities Commission. “We continue to hope we can work out a voluntary termination but, at this time, believed it is in our customers’ best interest to seek judicial determination that termination if legally justified.”
Mastic did not respond to Watchdog Minnesota’s requests for comment. Mastic previously informed state regulators that he had approached three companies in an attempt to sell the project’s power rights to recoup his investment. In an April letter to the MPUC, Mastic expressed frustration over several issues involved in the state permitting process, including environmental concerns.
“New Era has no confidence that due process for this project will ever end, nor that an ABPP (Avian and Bat Protection Plan) will ever be approved, however comprehensively and carefully drafted,” Mastic wrote.
On Tuesday, an attorney hired this week by New Era Wind Farm asked the MPUC for a two-week delay of a June 20 hearing in order “to become familiar with the issues” before the commission. The MPUC announced the hearing will go on as scheduled.
Opponents say this would be the first Minnesota wind generation project to fail to move forward primarily due to citizens questioning the impact and benefits of wind generation. Regardless of the outcome of the MPUC hearing or in the courts, observers acknowledge the controversy over New Era has already shaped the course of wind generation projects on the drawing board in Minnesota.
“I’m sure developers will be very thoughtful when it comes to working with landowners and neighbors in trying to develop a wind farm,” Alders said.
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