Xcel, EnXco Trade Lawsuits over ND Wind Farm
Less than a week after Xcel Energy, Inc., announced that it terminated an agreement with EnXco, Inc., involving the development of a wind farm in North Dakota, the two companies took their cases to court.
Both companies filed lawsuits Wednesday in U.S. District Court in Minnesota; EnXco alleges that Xcel breached its contract, and Xcel argued that the termination of the agreement was permissible.
Xcel announced last week in its first-quarter earnings report that it terminated its agreement with Escondido, California-based EnXco on April 1, and EnXco has since repaid a $101 million deposit that Xcel previously put down on the project-called the Merricourt Wind Project.
But EnXco claims in its suit that it met the terms of the agreement and that Xcel's decision to back out was “wrongful” and has caused damages in excess of $245 million.
Xcel disagrees and is asking that the court find that the termination was justified because certain conditions were not met that were needed for the project to move forward. Xcel also said that the closing of the deal did not occur on time.
Xcel cited ongoing, unresolved concerns about potential consequences that the project-a $400 million, 150-megawatt wind farm in southeastern North Dakota-could have on two endangered bird species, whooping cranes and piping plovers.
Xcel and EnXco announced their partnership on the wind farm in October 2008. Under the agreement, EnXco would develop and construct the wind farm, and ownership would be transferred to Xcel subsidiary Northern States Power Company (NSP) upon completion, which was originally scheduled for the end of 2011.
The two companies successfully completed the same type of transfer with the Nobles Wind Project in southwestern Minnesota in April 2010. That wind farm, a 201-megawatt project in southwest Minnesota, became operational in late 2010. It can generate enough power to serve approximately 66,500 homes, according to Xcel.
The state requires Xcel to derive 30 percent of its sales from renewable energy by 2020. The state's Renewable Energy Standard requires that other electric utilities supply 12 percent of energy for Minnesota consumers from renewable sources by 2012, 20 percent by 2020, and 25 percent by 2025.
Xcel is the state's largest utility and the ninth-largest public company based on revenue, which totaled $10.3 billion in 2010.