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Wind farms sue NPPD over termination of power purchase deal
Credit: Matt Olberding | Lincoln Journal Star | journalstar.com ~~
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Three Nebraska wind farms have filed a lawsuit against Nebraska Public Power District alleging the utility is improperly attempting to cancel power purchase agreements a decade or more before they expire.
The suit was filed Wednesday in U.S. District Court by Laredo Ridge Wind LLC, Broken Bow Wind LLC and Crofton Bluffs Wind LLC, and it seeks an injunction to stop NPPD from terminating the 20-year power purchase agreements.
All three wind farms are owned at least partially by Global Investment Partners, a New York-based company that invests in infrastructure assets and businesses.
According to the lawsuit, NPPD is attempting to use Global Investment Partners’ August acquisition of the wind farms and other assets from NRG Energy, as well as NRG Energy’s 2014 acquisition of the assets from their original owner, as the basis for the contract termination.
“On January 11, 2019, NPPD provided written notice to each project entity of an alleged event of default under the PPAs,” the lawsuit says. It says NPPD demanded that the defaults be cured within 30 days or it “intends to provide written notice of termination” as soon as Feb. 11.
The wind farms contend that the acquisitions do not constitute a breach of contract and even if they did, it would not have a material effect on NPPD because there is no increase in risk that the new owners will not fulfill their responsibilities.
On the other hand, the lawsuit says, termination of the power purchase agreements would have a material effect on the wind farms because it would put them in default with their creditors, potentially triggering foreclosure actions.
“Termination of the PPAs would effectively destroy each plaintiff’s wind energy project as a going concern,” the lawsuit says.
According to court documents, projected combined payments to the three wind farms in fiscal 2019 are more than $38.5 million.
The suit also says that termination of the purchase agreements would “immediately vest in NPPD a statutory right to acquire the projects by eminent domain.”
The lawsuit seeks both a temporary restraining order and preliminary injunction to stop NPPD from terminating the agreements, as well as a ruling from the court that the acquisitions do not constitute default under the contract terms.
NPPD, in an emailed statement, said its legal staff is reviewing the lawsuit. It declined further comment.
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