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TALKING OUT OF COURT

Endless Energy has withdrawn its $3 million suit against Zond System over development of a wind farm in Maine. The companies are now working on an out of court settlement and claim that a joint project can yet be realised.

A dispute between Endless Energy Corp in New England and California wind company Zond Systems Inc over a delayed project for three wind turbines may now be resolved out of court. Endless Energy had filed suit against Zond for $3 million in costs over the delayed project and subsequent cancellation of a 15 MW power contract. The suit was filed in federal district court in Portland, Maine, but has now been withdrawn, says Endless Energy's lawyer, Phil Coffin. The companies are now trying to resolve the issue out of court. Zond's Ken Karas says his company is not at fault and the project is still viable.

Endless Energy, based in New Gloucester, had brought Zond in as financial partner in August, 1993, to help develop the project, in a ski area at the top of Sugarloaf Mountain with a power contract with Central Maine Power. Three Danish Vestas V27 turbines were to have been installed -- and were indeed hauled to the site, but later shipped back to California, where Zond is based.

The relationship between the two companies soured after construction was halted and the power purchase agreement with the utility lapsed -- just weeks before it was to have been executed by November 1. Endless Energy alleges it was Zond's fault the project was not installed in time and that it is now $3 million out of pocket. The company's Harley Lee says Zond did not help get the contract extended and that Endless was unable to act as it did not have financing. "They came late and left early," he says. Lee says it may be hard to get another utility contract as the energy market in New England is nowadays less favourable. Even so, Endless Energy still hopes to develop a larger project of 30 turbines in Maine at Mount Redington. Zond denies wrongdoing, saying the rock formation at the Sugarloaf site was very different from what they had been told. Bad winter weather then hit and the deadline for the power contract was missed. Ken Karas also disputes that another contract will be hard to secure. "Yes, we can get [another] economically viable contract for that project," he says. "To keep that particular contract alive made no economic sense."

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