A federal judge has vindicated Xcel Energy Inc. for its 2011 decision to cancel a $400 million wind farm in North Dakota that posed a potential risk to two protected birds.
U.S. District Judge Michael Davis dismissed a lawsuit filed by the developer of the 100-turbine Merricourt project, which remains unbuilt amid lingering fears that whooping cranes and piping plovers will be slashed to death by its turbine blades.
The developer, EDF Renewable Energy, a U.S. affiliate of Paris-based EDF Energies Nouvelles, sued Xcel for up to $103 million in losses after the Minneapolis-based utility terminated its deal to buy power from the wind farm. Until last August, the development company called itself EnXco.
Davis, in ruling issued Thursday in Minneapolis, dismissed the case before trial, saying that Xcel had a right to cancel its agreement at a drop-dead date — March 31, 2011 — because EDF had not yet obtained a state site permit as required by the contract. Bird concerns and other factors delayed the permit, which was approved in June 2011 by North Dakota utility regulators.
“We do not believe the brief delay, which had no impact on the project, Xcel or its ratepayers, justified the termination,” EDF spokeswoman Sandi Briner said in a statement. “We disagree with the court’s ruling and plan to appeal.”
EDF had alleged that Xcel saw a financial advantage in canceling the Merricourt deal because wind turbine prices had dropped during the recession. The termination left EDF on the hook for turbines it already had purchased. Xcel contended that EDF deployed the turbines at another wind farm, cutting its losses.
In his ruling issued Thursday, Davis wrote that EDF “is a sophisticated commercial entity that has entered into many projects involving wind projects and ... is knowledgeable of the varying risks that may arise with respect to such projects.”
Xcel, which has the most wind power of any U.S. utility, applauded the ruling.
“We designed this contract — as we do all agreements — to protect our customers,” Judy Poferl, CEO for Xcel’s Minnesota region, said in a statement. “When things don’t go according to plan, as occurred here, we will take action on our customers’ behalf.”
Xcel recently asked energy developers for proposals to build additional wind projects in the Upper Midwest. Asked if Xcel would consider wind projects by EDF, an Xcel spokeswoman responded: “Our process it to evaluate all projects based on their merits and how well they meet customer needs.”
Bird issues still linger
Although the Merricourt project near Ellendale, N.D., has a site permit, it still lacks a key federal permit allowing limited, accidental killing of the rare birds. Conservation groups are opposed to the U.S. Fish and Wildlife Service granting such a permit for the whooping crane.
EDF has contended that bird-protection issues can been addressed, and is now conducting studies of the threatened piping plover and the endangered whooping crane, which migrate through the region. Eventually, EDF would need a federal “incidental take” permit to avoid criminal prosecution if a protected bird were killed by turbines.
If EDF revives the project on appeal or by finding a new buyer, the American Bird Conservancy, a nonprofit advocacy group, says it will oppose granting a permit to kill whooping cranes because fewer than 400 of them exist in the wild.
“There aren’t enough whooping cranes left,” said Kelly Fuller, who leads the conservancy’s wind campaign. “There has been a tremendous conservation effort to save this bird and this project really has come under fire from the conservation community.”
Fuller said the conservancy hasn’t yet taken a position on whether it would oppose an incidental take permit on the piping plover. She said the group wants to see the environmental studies first.