Turbulence hits farm: Wind facility owner and utility launch dueling lawsuits

The owner of the state’s largest wind farm and the utility purchasing its power are suing each other over breach of contract in a dispute centering on the level of bird-protection measures in place at the facility.

San Diego Gas and Electric filed a lawsuit Thursday in San Diego Superior Court against Rim Rock wind farm owner NaturEner asking the court to confirm its allegation that the company did not meet contractual requirements related to the preservation of eagles, raptors and other protected bird and bat species.

“Unfortunately, the project’s owner, NaturEner, did not meet its contractual requirements, so SDG&E has decided not to make the investment in Rim Rock or to continue purchasing its renewable energy credits,” Jennifer Ramp, a spokeswoman for San Diego Gas and Electric, said in a statement.

NaturEner USA, based in San Francisco, a subsidiary of Spain-based Grupo NaturEner, filed its own lawsuit alleging breach of contract Friday in Toole County District Court in Montana.

NaturEner’s lawsuit argues San Diego Gas and Electric is using avian conditions at the wind farm as a pretext for escaping its contractual obligations.

“Conditions in the contract require us to develop a documented bird and bat conservation strategy in consultation with the U.S. Fish and Wildlife Service,” NaturEner spokesman Patrick Ferguson said. “We have done that. We have met the contract conditions.”

San Diego had previously agreed, under certain conditions, to invest $300 million in ratepayer funds in the project and also purchase renewable energy credits, Ramp said.

Some of the most important conditions of the agreement with NaturEner relate to birds, she said.

NaturEner has, in fact, gone above what’s required in protecting birds by implementing industry-leading wildlife conservation measures, including the use of radar detection systems and trained avian biologists, Ferguson said.

No eagles have been killed, he said.

“We believe a deal is a deal and everybody, even folks that run a power company in California, should keep their word,” Ferguson said.

San Diego Gas and Electric has “buyer’s remorse” and is trying to “weasel out of the deal” in order to purchase renewable energy elsewhere at a less expensive price, Ferguson said.

The lawsuit says the market price of renewable energy credits for California utilities was high and expected to climb higher between 2008 and 2011.

To meet the requirements, San Diego Gas and Electric locked into a long-term reliable source of renewable energy at fixed rates, the lawsuit says.

Since the 20-year purchase agreement was signed, the market price of renewable energy has dropped, the lawsuit says.

The lawsuit also says that San Diego Gas and Electric also agreed to become a significant equity investor in Rim Rock in order for Natur-

Ener to obtain loans to build Rim Rock.

NaturEner pledged most of its assets and equity interests as collateral to secure construction loans from Morgan Stanley for construction of the $400 million Rim Rock, the lawsuit says.

Besides the lawsuit, NaturEner filed an emergency injunction Friday to prevent San Diego from terminating the contracts in January before the lawsuit is heard.

NaturEner is asking for a declaration from the court that the avian conditions challenged by San Diego Gas and Electric have been satisfied “to avoid imminent, irreversible and catastrophic harm resulting from a wrongful termination of contracts.”

Rim Rock is north of Ethridge near the state’s northern border. It produces 189 megawatts. It became operational in September 2012.