Fagen Inc. said the southwest Minnesota wind farm's original developer is $11M in arrears.
The Big Blue Wind Farm under construction in southwest Minnesota is generating confusion rather than electricity.
Fagen Inc., a Granite Falls, Minn., contractor erecting 18 turbines west of the city of Blue Earth, has asked a judge to declare it the owner of the project.
In court papers, Fagen alleged that the original developer of the project, Exergy Development Group of Idaho, didn't repay $11 million it borrowed from Fagen, causing the wind farm's ownership to transfer to Fagen under a February agreement.
Fagen contends that Exergy, a Boise-based energy developer that has faced recent financial difficulties, is still acting as though it's in charge of the Minnesota project by sending progress reports to Xcel Energy Inc., the Minneapolis-based utility that would purchase the power. Meanwhile, Fagen continues to build the wind farm and has sent its own reports to Xcel.
That has provoked questions by Xcel, which this month informed the developers that it was "understandably concerned about these conflicting and confusing communications," according to an Xcel letter disclosed in the court case.
If the dispute keeps the wind farm offline this year, it could put in jeopardy a $22 million federal subsidy, according to the lawsuit filed by Fagen. The suit, filed this month in state court, was transferred Tuesday to U.S. District Court in Minnesota in a procedural move by Exergy's attorneys.
Exergy said in a statement it would defend itself in court against the Fagen allegations, which “are entirely without merit,” and expressed confidence the project would be built on time.
The wind farm, just west of Blue Earth, is being built with 18 Gamesa 2-megawatt turbines that altogether can supply power for 20,000 homes. As of early October, three turbines had been erected, and towers had been started for half of the remaining units, according to the most recent Xcel regulatory filing.
Fagen is a prominent contractor, best known for building approximately 100 ethanol plants. In recent years, it has branched out into other kinds of renewable energy, including building other wind farms for Exergy. Fagen officials did not return phone calls.
Exergy has described itself as one of the nation's "major independent renewable energy developers." In August, the company was sued by AES New Creek Wind in U.S. District Court in Idaho for failure to pay more than $35 million for wind turbines to be installed in Idaho.
Exergy recently suspended development of a series of Idaho wind projects, blaming regulatory delays and other factors. It also was late in paying the bills of a Boise bicycle race that the company sponsored this year.
David Shaffer • 612-673-7090