Strong denial of conspiracy claims -- FPL and RES in mediation

British owned group Renewable Energy Systems (RES) denies all allegations by US giant FPL Energy that it or its subsidiaries entered into secret relationships to form a wind development company with an officer and several FPL managers while they still worked for FPL. RES group companies have been FPL contractors for several years and hold contracts worth about $378 million with FPL Energy (FPLE) to build two large Texas wind projects.

The allegations made by FPL are "completely unfounded, false, outrageous and defamatory," according to RES defence documents. It appears, however, that a deal of FPL's grievances pertaining to unfair competition have been "resolved in a mediation agreement," according to the defence, which claims the RES group is "without knowledge" of alleged wrongdoing by former FPL employees.

Five top FPLE men walked out, apparently to set up their own company. FPL says this competing company was formed long before the walk out and that it was done on FPL time and with FPL resources. The walk out occurred June 29 when FPL's wind development head, Robert Morrison, resigned together with Carl Kiesel, project analysis director, Gregory Law, tax director, Thomas Fair, project director, and David Capparelli, project manager.

Although FPLE officials refuse to talk about it, FPL's response to the walk out is a law suit that claims the five "surreptitiously conspired to recruit FPLE's employees to join a new energy development company that would compete with FPLE's business and to misappropriate FPLE's confidential proprietary business information and trade secrets for use in their new competing company," according to court documents.

FPL, America's largest developer of wind projects, also directed the suit against RES, saying that it "participated in and bankrolled this tortious activity and unfair competition for its own financial benefit directly and through its affiliates." The RES group defence states there was no "bankrolling" and no intent to "wound or disrupt" FPLE. The lawsuit "is an effort to punish" former employees for "pursuing more desirable employment." According to the defence, "Each of the individuals had decided to leave their employment with FPLE prior to entering into a relationship with any other defendant." Further, RES as a UK company is outside the jurisdiction of the court.

The complaint argues that the five defendants, particularly Morrison, began to form a company in April 2000 called Renewable Energy Ventures LLC (REV). At some point, the complaint says, Morrison agreed secretly with RES to set up an energy development firm and signed a confidentiality agreement with the RES group. Some time before June 30, 2001 REV and RES formed American Renewable Energy LLC (ARE), with a majority ownership going to RES. RES agreed to guarantee the company's financial obligations.

FPL also levelled two complaints directly at Morrison, claiming he obtained proprietary information from an FPL project manager and that he arranged for RES to get two big FPLE contracts as a way to "funnel" money to RES, which FPL says gave the defendants "more leverage in negotiating their secret deal with RES." Those contracts are the King Mountain and Woodward Mountain Ranch wind farms in Texas, according to the complaint. The defence states there was no funnelling of money or leverage" during negotiation. Indeed, "FPLE has benefited significantly from the investment opportunities presented to it."

Morrison declines to comment on any aspect of the lawsuit while it is being litigated.