Jousting over wind farm extends beyond court; Wyoming County landowners caught in crossfire of $56M legal dispute

A $56 million court battle over costly delays to the Mehoopany Wind Farm last year has a contractor sparring with BP Wind Energy in two states, with subcontractors and area landowners caught in the crossfire.

Colorado-based RES Americas filed suit against BP Wind and a related firm in Wyoming County Court, seeking $56,189,303 that the contractor says it is owed for work done to ensure that the $250 million wind farm went on line by Dec. 31. That deadline was to take full advantage of a federal tax credit set to expire.

The 88-turbine wind farm spans a 9,000-acre site spread across Noxen, Forkston, Mehoopany and Eaton townships.

The suit names as defendants BP Wind and Mehoopany Wind Energy LLC, which actually owns the property. Both are Delaware corporations with principal business addresses in Texas, and BP Wind is a partner in MWE.

Delay factors cited

RES blames delays that prompted the extra expenses on BP Wind and MWE, citing their inexperience with mountainous terrain, problems with permitting processes, failure to provide proper access to work sites and the late delivery of materials that resulted.

BP Wind and MWE counter in their response to the lawsuit that "most or all of the additional costs result from RES's own self-inflicted performance issues," and have filed a separate suit against RES in Texas, seeking more than $32 million in damages.

While the out-of-state corporations pursue their differences in court, more than a dozen area property owners who signed leases or easement deals allowing the wind farm onto their land received lien notices against the affected properties from subcontractors seeking payment while the battle between RES and BP Wind and MWE remains unresolved.

Doug Kilday, an Austin, Texas attorney representing RES, said his client is willing to put up bonds that will secure the subcontractors' claims against RES and satisfy the liens while the case is pending.

Calls to John P. Miller, a Pittsburgh attorney representing BP Wind and MWE, were not returned this week. But court records show that about 30 liens against MWE and property owners filed by one of the contractors, AUI Construction Group of Fort Worth, Texas, were discharged earlier this month after security was pledged in those cases.

Oral arguments in RES's Pennsylvania suit are scheduled to be heard at 11 a.m. Aug. 5 at the Wyoming County Courthouse in Tunkhannock.

"RES is a hero, they pulled this thing out of the ditch," Kilday said of the contractor, which claims it was authorized by the owners to do whatever was necessary to meet the year-end deadline in the face of mounting delays.

Change orders factor in

RES also alleges Mehoopany Wind Energy said "that change orders could be handled at the end of the project," yet refuses to pay for the costs which resulted.

"RES's submissions failed to include the information necessary to support or even evaluate RES's allegations regarding liability for, or amount of, the alleged claims," Mehoopany Wind Energy replied.

The project was slated to start in October 2011, and was originally scheduled to be completed by Oct. 22, 2012. But cascading delays plagued the problem from the start, RES alleges, from permitting issues and inadequate access to unexpected underground conditions and work restrictions imposed after the work was delayed into hunting season.

RES argues that the delays arose from BP Wind's inexperience with building in rugged areas like Wyoming County, and from the failure of BP Wind and MWE to provide RES with information and documentation in a timely fashion.

"Despite its vast experience with wind projects in many areas, BP actually had no experience in developing, designing, planning and constructing a wind project in Pennsylvania or in any other mountainous and heavily wooded area," a fact BP did not disclose, according to the RES suit.

Among the alleged delays that resulted, according to RES:

• MWE did not keep RES properly updated about changes to state Department of Environmental Protection permits that dictated where trees could be removed to make way for work.

• The aging Main Street bridge over Bowman's Creek in Noxen, necessary to access the work site, was closed to traffic over 10 tons. Upgrades pledged by BP Wind and MWE were not completed until Jan. 27, 2012. Access to Tannery Road as a backup route was not secured as agreed.

• A second access route, "Road B," was not built as agreed.

• Design of an arch-culvert needed for access was modified, causing more delays.

• RES also claims it encountered "unforeseen subsurface conditions" at multiple locations, including abrasive rock, wet and swampy soils, as well as soft, unstable material.

• As the project moved into the fall, tornado warnings, lightning and the effects of Hurricane Sandy compounded previous delays.

• Further delays were created by transmission line design changes, late turbine and transformer deliveries and restricted access to certain properties where hunting rights were in force.

MWE's response counters that RES "failed to meet each and every one of the interim completion dates" required under the project.