Xcel Energy has filed a lawsuit to end its power purchase agreements with the New Era wind project sited near Zumbrota, and is seeking an unspecified amount of damages.
The lawsuit was filed Friday in Hennepin County District Court after a series of written exchanges from lawyers over the past 22 months failed to resolve the issue.
Xcel is seeking a declaratory judgment to resolve the multi-million dollar dispute, according to the recent 24-page filing. If that isn’t possible, a jury trial has also been requested by Xcel.
“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,” Xcel Strategy Consultant James Alders wrote in the PUC filing. “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 is legally justified.”
Attorney Todd Guerrero, New Era’s new legal counsel, responded to the lawsuit Tuesday by requesting a two-week extension “to become familiar with the issues” in a letter filed at the PUC. The wind project is scheduled to be discussed Thursday in St. Paul as the wind project continues its four-plus year pursuit of state permits that has already cost developers more than $15 million.
It’s unclear how much Xcel is seeking in damages. The court filing requests “such costs as the Court may deem equitable and just” rather than a specific dollar amount.
Xcel’s legal filing claims New Era agreed to pay delay damages if it did not meet various milestone dates. That language was approved by the PUC in 2010 for two 39-megawatt contracts.
Additionally, Xcel’s lawsuit claims that New Era was required to establish a security fund totaling $5.85 million – or $2.925 million per agreement – by Aug. 28, 2010, “in one of three forms,” which are undefined in the public paperwork. Despite numerous requests from the energy company, that fund was never created.
Other alleged breaches of contract include New Era failing to meet the commercial operation deadline of Dec. 31, 2011. Xcel also claims that it didn’t give prior written consent for change of control prior to current owner Peter Mastic purchasing the entire project from Texas billionaire T. Boone Pickens in 2012, as required by the PUC.
The issue has been contested since January 2011. Unable to resolve their differences, Xcel ultimately issued a default notice to New Era in December 2012. New Era attempted to resolve the issue by requesting the ability to transfer the agreements to other wind projects, but Xcel rejected that proposal in April 2013.
The PUC is expected to rule today on New Era’s request to delay Thursday’s hearing. An initial court date has not yet been set for the lawsuit.
The Minnesota Public Utilities Commission’s agenda will still include the New Era wind project on Thursday morning, despite requests from the wind project’s new legal counsel requesting a delay, a spokesperson from the PUC said Wednesday afternoon.
Todd Guerrero, New Era’s attorney, submitted his written request on Tuesday, asking for two weeks to gather the facts after Xcel Energy recently filed a lawsuit in Hennepin County District Court seeking to end its two power purchase agreements with the wind project, along with unspecified monetary damages.
Xcel Energy’s compliance filing with the Minnesota Public Utilities Commission regarding the power purchase agreements with Goodhue Wind.
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