A settlement of a lawsuit involving Montana’s largest wind farm and protections for hawks and eagles has been reached between owner NaturEner USA and San Diego Gas & Electric, which is buying the power it produces.
SDG&E agreed to help finance the Rim Rock project and purchase the power, but later sued NaturEner USA arguing it had been mislead about the threat to raptors. That prompted NaturEner to file a breach-of-contract counter suit against SG&E.
The conditional settlement agreement to end the litigation was filed Feb. 11 with the California Public Utilities Commission, and that agency still must rule on the proposal, SDG&E spokeswoman Stephanie Donovan said.
Two groups have intervened: The Utility Reform Network, a consumer group, and the Office of Ratepayer Advocates, an independent arm of the commission.
Under terms of the settlement, the parties agreed to terminate a $285 million tax equity investment by SDG&E, but the utility will continue to purchase power generated at the wind farm.
And NaturEner USA would agree to apply for an eagle take permit under the Bald and Golden Eagle Protection Act from the U.S. Fish and Wildlife Service.
San Francisco-based NaturEner USA, a subsidiary of Spain-based Grupo NaturEner, also agreed to pay an undisclosed amount of money to SDG&E, and the parties agreed to release claims against each other.
“One of the reasons we wanted to come to a settlement is it’s basically a positive outcome for all parties involved,” Donovan said.
NaturEner USA spokespersons could not be reached for comment.
SDG&E originally agreed to buy power to meet renewable energy requirements in California. After NaturEner encountered difficulty securing financing due to the financial crises, SDG&E agreed to invest $285 million, once the facility was running, which allowed NaturEner USA to secure a $320 construction loan from Morgan Stanley.
But disputes began to arise over safeguards for birds during the planning and construction of the 189-megawatt wind farm, which became operational Oct. 15, 2013.
Rim Rock is located on Kevin Rim, 20 miles northwest of Shelby, which has the highest density of Ferruginous hawks in Montana.
It’s also home to several other species of raptors including federally protected golden eagles, and Montana Audubon and the U.S. Fish and Wildlife Service raised concerns about the location and the birds striking the spinning turbines or being driven from the area.
In response, NaturEner USA shifted locations of some of the turbines.
On Dec. 19, 2014, SDG&E filed a complaint against NaturEner USA in the Superior Court of California.
The lawsuit said NaturEner USA knew Rim Rock’s large wind turbines were potentially dangerous to protected birds and misrepresented the risks in order to secure funding for the project and a power purchase agreement from SDG&E.
The lawsuit said NaturEner USA led SDG&E to believe it was investing in a low avian risk project, but in reality the project would result in in illegal “take” of golden eagles and other species.
The next day, NatureEner USA, arguing it had implemented conservation measures, filed a counter complaint in Toole County against SDG&E for breach of contract that sought to prevent SDG&E from reneging on the promise to buy the power. It alleged SDG&E had buyer’s remorse because of the falling price of renewable power.
The Montana Supreme Court dismissed the Montana case in July 2014, ruling the contractual agreements should be heard in California.
SDG&E, NaturEner USA and Morgan Stanley had been scheduled to go to trial May 6 in San Diego Superior Court, but the parties agreed to cancel the date. The conditional settlement agreement is not fully effective until approved by the California Public Utilities Commission.
The parties are seeking a decision on the petition no later than Aug. 30.
SDG&E is making conditional payments for power but it has not made the tax equity investment, according to the proposed settlement filed with commission.
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