Xcel Energy (NYSE: XEL) said in its Aug. 2 Form 10-Q report that a legal battle with enXco Development Corp. over a terminated 150-MW wind project has moved to an appeals court.
In April 2011, Xcel’s Northern States Power-Minnesota unit terminated its agreements with enXco for the development of a 150-MW wind project in southeastern North Dakota. NSP-Minnesota’s decision to terminate the agreements was based in large part on the adverse impact this project could have on endangered or threatened species protected by federal law and the uncertainty in cost and timing in mitigating this impact, Xcel noted. NSP-Minnesota also terminated the agreements due to enXco’s alleged nonperformance of certain other conditions, including failure to obtain a Certificate of Site Compatibility and the failure to close on the contracts by an agreed upon date of March 31, 2011.
NSP-Minnesota recorded a $101m deposit in the first quarter of 2011, which was collected in April 2011.
In May 2011, NSP-Minnesota filed a declaratory judgment action in the U.S. District Court in Minnesota to obtain a determination that it acted properly in terminating the agreements. enXco filed a separate lawsuit in the same court seeking about $240m for an alleged breach of contract.
In October 2012, NSP-Minnesota filed a motion for summary judgment. In April of this year, the U.S. District Court granted NSP-Minnesota’s motion and entered judgment in its favor. On April 23, enXco filed a notice of appeal to the U.S. Eighth Circuit Court of Appeals.
“It is uncertain when the Eighth Circuit will decide this appeal,” the Form 10-Q said. “Although Xcel Energy believes the likelihood of loss is remote based on existing case law and the U.S. District Court’s April 2013 decision, it is not possible to estimate the amount or range of reasonably possible loss in the event of an adverse outcome of this matter. No accrual has been recorded for this matter.”