Finding that the company did not meet statutory mandates, the Minnesota Public Utilities Commission on July 26 ordered AWA Goodhue Wind LLC to either begin construction right away or give up a site permit for a 78-MW wind farm project in Goodhue County.
This case involved four closely related dockets: an application for a certificate of need to build a 78-MW wind farm (now called New Era Wind Farm) in Goodhue County; an application for a site permit for the wind farm; and a request for approval of two contracts to sell the electricity from the wind farm to Xcel Energy (NYSE:XEL). In three earlier orders the Commission granted the certificate of need, issued a site permit and approved the contracts.
All three orders based their determinations on the project’s anticipated in-service date of Dec. 31, 2011. The wind farm was not built on schedule, however, and on Dec. 31, 2012 – the last day of the one-year grace period provided under the certificate of need rules – the project owner filed a request to extend the certificate of need’s in-service date until Dec. 31, 2013.
Scores of local residents and organizations filed opposing comments. For example, commenters claimed that all the original owners of the limited liability company that owned the wind farm had sold their interests to a single, out-of-state owner, eliminating the local ownership that had played a critical role in the finding that the project was a Community-Based Energy Development (C-BED) project under Minnesota statute. Since the project’s C-BED status had been central to the approval of its power purchase contracts with Xcel and to the issuance of its certificate of need, these commenters urged investigation or rescission of the certificate of need.
Four local legislators also filed comments urging the commission to reexamine the project’s C-BED eligibility. The Goodhue County Board of Commissioners asked the commission reexamine the project’s C-BED status before the board took final action on a pending resolution to rescind an earlier resolution expressing county support for the project.
The commission found that the New Era project was and is subject to the anti-transfer provision of C-BED statute and that the transfer of the project and its associated purchased power contracts to the current owner is prohibited under state statute.
The commission declined to recertify the certificate of need due to New Era’s failure to demonstrate that it will comply with the commission’s orders and due to its failure to show that it is prepared to move forward with the project for which the certificate of need was obtained, including the failure to specify a current in-service date.
Within 14 days of the date of this order, New Era needs to either surrender its site permit or show cause that it intends to begin construction by Aug. 23, two years from when the site permit was granted, and that its site permit should not be revoked. If the project states that it intends to begin construction by Aug. 23, it needs to demonstrate that it is able to begin construction by that date.
If New Era makes a filing stating that it intends to begin construction by Aug. 23, it has to provide by that date a more comprehensive response to the commission’s request about allegations by members of the public alleging deficiencies in its performance on wildlife monitoring and protection issues.
One passage from the order didn’t give out much hope construction could start by Aug. 23: “The Commission will not extend the in-service date in the certificate of need because there appears to be no reasonable likelihood that the project will move forward in the time frame proposed or in one consistent with the public interest in reasonable land-use planning and community stability.”
Xcel stated in this case that on June 14 it had filed a declaratory judgment action in Minnesota district court requesting a declaration that it could terminate the contracts based on four alleged contract violations: failure to establish a security fund protecting Xcel from non-performance; failure to meet construction milestones, including one for securing project financing; failure to pay liquidated damages for delays in completing the project; and failure to secure Xcel’s consent before transferring ownership or control of the project to another entity.