SDG&E, wind farm in legal tangle; Utility files suit claiming breach of contract over birds

SAN DIEGO — A messy legal dispute has broken out between San Diego Gas & Electric and the owners of a Montana wind farm supplying renewable energy credits to the local utility.

SDG&E claims the project owners failed to disclose how dangerous the windmills are to golden eagles and other rare birds. It filed a breach-of-contract suit in San Diego County on Thursday and wants the deal voided.

NaturEner USA, which owns the Rim Rock wind farm in northern Montana, sued SDG&E on Friday, claiming the utility wants to back out of the deal due to the falling price of renewable power. It wants the agreement upheld and unspecified damages.

Trial dates have yet to be scheduled and it is not clear if the cases will be merged.

The two litigants agree on this much: SDG&E contracted to spend $285 million financing construction of the turbines and buying renewable energy credits to help satisfy California rules requiring utilities to get 20 percent of their power from renewable sources.

But earlier this month, SDG&E notified NaturEner that it was not satisfied with progress the company had made complying with federal rules designed to protect golden eagles and other birds.

It also accused the company of deliberately misleading the utility.

“NaturEner has repeatedly breached the terms of its agreements with SDG&E, has made statements now proven to be untrue and is attempting to compel SDG&E’s performance despite its own failure to perform,” the suit says.

The next day in a Toole County, Mont., courthouse just miles from the Canadian border, NaturEner filed a separate complaint claiming SDG&E wants out of the deal because renewable energy costs have declined.

The company claims SDG&E is using the threat to birds as an excuse to void the agreement and save money on energy purchases.

“These circumstances suggest that SDG&E is attempting to use the Avian Conditions and other conditions as a pretext for escaping its contractual obligations,” the NaturEner suit states.

According to both complaints, the turbines may pose a threat to golden eagles and other rare birds in the region.

NaturEner says it worked with the U.S. Fish and Wildlife Service to reduce the threat. Biologists and consultants recorded almost 20,000 minutes of count surveys and golden eagles were observed in only seven of those minutes, the company said.

“NaturEner has satisfied the Avian Conditions,” the suit states. “Indeed, NaturEner has taken the steps to design, construct and operate a world-class, environmentally friendly wind power project that has an extremely low risk of harming eagles and other avian species.”

SDG&E says NaturEner withheld key information and the utility may not have signed the agreement had it known the extent of threat to endangered birds.

“Had SDG&E been aware of the truth, it very likely would not have entered into contracts involving hundreds of millions of dollars,” SDG&E’s suit states.

The San Diego utility may be leery of the Montana project’s impacts on golden eagles following its own violations while building another major construction effort.

When the Sunrise Powerlink was being built between Imperial and San Diego counties in 2011 and 2012, helicopters violated restricted “no-fly” zones aimed at protecting golden eagles.

The company suspended two pilots and state regulators imposed extra conditions as a result of repeated incursions.

California law requires investor-owned utilities to secure an increasing amount of power from renewable sources. The current 20 percent mandate climbs to 33 percent by 2020.

In 2012, SDG&E reported 20.3 percent of its power came from wind farms and other renewable sources, just ahead of Southern California Edison and Pacific Gas and Electric.