United States

United States

Two heavyweights head for the courts

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A major legal battle is starting between the two largest and fastest growing players in the American wind business. On July 31, ESI Energy Inc filed a lawsuit in the US District Court in San Diego alleging "breach of contract" by Enron Wind Corp. ESI Energy, now known as FPL Energy, is the investment wing of the US energy giant FPL Group and holds the world's largest wind farm development portfolio. Enron Wind was Zond Corp before it was bought by natural gas and electricity firm Enron Corp.

The federal suit alleges that Enron Wind breached a joint venture agreement that preceded Zond's purchase by Enron Corp. ESI is the equity partner in America's largest wind farm, the 107 MW Phase II of the Buffalo Ridge plant just completed for Minnesota utility Northern States Power. Although it is not yet clear what is in dispute, ESI's equity holding in Buffalo Ridge is a likely possibility.The relationship between ESI and Enron Wind stems from the early 1990s when ESI became an equity holder in Zond's Sky River wind plant in the Tehachapi Pass in southern California.

Few specifics about the dispute can yet be pinned down. As of August 24, lawyers for Enron Wind had not formally responded to the complaint, apparently about 40 pages long, or to the summons, said staff at the US District Court. A spokesman at ESI's head office in Florida was adamant in refusing to comment. "He was very firm," said an assistant, who declined to give the spokesman's name or her own. Officials at Enron Wind, in Tehachapi, and the two top spokespeople for Enron Corp in Houston also failed to respond.

Both FPL and Enron Wind are aggressively pursuing opportunities in wind. FPL is a key player in the international consortium WindCo, now active in repowering some of California's older wind farms. Other consortium members include the UK's Renewable Energy Systems, the turbine maker NEG Micon of Denmark, and Nichimen of Japan. FPL was also selected in February to build a 75 MW wind plant at McCamey in Texas, although it has since emerged that utility Central and South West is re-opening the tender -- because there were errors in wind data supplied to bidders by a consultant to CSW -- and that the winning bid may not even be wind.

Enron Wind is expanding rapidly too. Earlier this year it was expecting to install 400 MW of wind by early 1999. The largest projects are the two "Storm Lake" wind plants in northwestern Iowa, which will total 188 MW when completed next year. In Minnesota, on Buffalo Ridge, Enron is also to install another 103.5 MW. A power purchase contract was signed for this Phase III of the ongoing development in April. And in Palm Springs, Enron's Cabazon project is being repowered with 40 MW of Zond Z-series turbines.

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