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Utility alleges fraud in Cut Bank wind farm deal
Credit: By Matthew Brown, Associated Press, 04-01-14 | www.flatheadbeacon.com ~~
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BILLINGS – A California utility that invested in a Montana wind farm has accused the developer of fraudulently concealing that federal wildlife officials recommended the project get a permit in case it harms eagles.
San Diego Gas & Electric and a subsidiary of Spanish wind developer NaturEner filed dueling lawsuits in California and Montana stemming from a dispute over the wind farm near Cut Bank.
At issue is whether NaturEner followed through on contractual obligations to protect eagles and other birds that nest near the 126-turbine Rim Rock wind farm.
NaturEner spokesman Patrick Ferguson on Monday rejected the fraud allegation.
SDG&E said in court documents filed Friday in California Superior Court that the U.S. Fish and Wildlife Service recommended NaturEner get a wildlife “take permit” so the company would not be in violation of federal law if any birds were killed at Rim Rock.
Passages of emails between federal officials in which they discuss the need for a permit were submitted to back the claim. The utility’s lawyers said NaturEner concealed such information to induce SDG&E to invest $285 million in Rim Rock and buy renewable energy tax credits under a power purchase agreement.
“NaturEner concealed and intentionally omitted information,” SDG&E attorney J. Michael Hennigan wrote. He added that NaturEner “acquired SDG&E money, and caused SDG&E to incur expenses, through its unfair and fraudulent business practices.”
NaturEner’s Ferguson said the allegation was an attempt to “divert from what we think their real motive is, which is breaking the contract.”
SDG&E has suffered from buyer’s remorse, Ferguson said, as prices have fallen for the renewable energy credits the utility was obligated to purchase under its contract.
The government emails cited by the utility in its fraud allegation were dismissed by NaturEner as internal Fish and Wildlife Service communications that had been taken out of context.
Ferguson said wildlife officials told NaturEner that it was ultimately up to the company to decide if it wanted to pursue a permit allowing it to take eagles or other birds.
Fish and Wildlife Service spokesman Leith Edgar said he could not immediately respond to the conflicting arguments.
The Rim Rock wind farm is near an area with seven golden eagle nests and Montana’s densest concentration of ferruginous hawks.
Under federal law, a take permit is required for activities that could injure, kill or otherwise harm protected birds such as eagles.
No eagles have been harmed or killed since the project began operating in 2012, Ferguson said.
NaturEner has put measures in place to protect the birds from harm. That includes the use of radar and on-the-ground spotters to identify approaching birds so the turbines’ massive blades can be halted before the birds are killed.
A Montana judge in February issued a temporary restraining order that blocked SDG&E from canceling the power purchase contract.
That order did not cover the utility’s commitment to invest $285 million in the $400 million project. The agreement governing that investment expired March 14, according to SDG&E.
Ferguson said NaturEner intends to ask Montana District Judge Brenda Gilbert to enforce the investment agreement.
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