A couple of major players in wind energy are tangling over the cancellation of a big project in North Dakota.
Xcel Energy is pulling out of the wind farm, a step its partner, enXco said it will challenge.
The $400 million, 150-megawatt Merricourt Wind Project is supposed to be built this year in southeast North Dakota, but construction is in doubt now, after Xcel Energy announced that it's rescinded its agreement to be part of the project.
Xcel's only comments have been a prepared statement and a filing with the Securities and Exchange Commission. In the SEC filing, it said a major factor in the decision to pullout was the "adverse impact this project could have on endangered or threatened species." Jeff Towner of the U.S. Fish and Wildlife Service said there are two species in question -- "[t]he endangered whooping crane and the threatened piping plover."
Towner recommended in the summer of 2009 that the wind farm address the threat posed to the two bird species. Towner says he told the onsite developer, enXco, to request a federal permit for the project. If the permit were granted, it would allow a certain level of bird kill or injury of the rare species at the Merricourt Wind Project.
"I was hopeful that they would follow through," said Towner.
The federal regulatory process can take months, sometimes more than a year. But Towner didn't see anything until last week. That's when enXco filed a draft plan on how the company would lessen the threat to birds at the wind farm. Towner says the company has indicated it is also working on the permit request, but so far nothing has been filed.
enXco said in a news release that it is still working on the bird questions, but refused MPR's request for an interview.
For its part, Xcel Energy hinted that it's not happy with its partner's handling of the federal bird issue. In the SEC filing, the company says there exists "uncertainty in the cost and timing in mitigating" the wind farm's impact on the two rare species. That impact could be expensive.
Towner said the owners of the wind farm could face up to a year in jail or a $200,000 fine if either the whooping crane or plover were injured or killed at the wind farm without federal approvals in place.
"Any company needs to be diligent that that does not occur as part of their project construction or operations," said Towner.
enXco questions the timing of the whole affair. Although Towner says he alerted the company more than a year and a half ago, enXco says in its written statement the bird issues were only "recently raised." The wind development company says it will dispute Xcel Energy's pullout, but it doesn't say specifically how it will do that.
Twin Cities attorney Dan Schleck is following the struggle. He's represented individuals and companies involved with wind projects. Schleck said risk is a big deal with large projects like Merricourt. He wonders if the bird issue is a big enough reason for Xcel Energy to pull out.
"It may be to the point where it's one of many cumulative risk factors that they're evaluating with respect to this project, and it just got to the point where cumulatively the risk was too high to go forward," he said.
Schleck said some other factors that can affect project risk include financing, the price and availability of wind turbines and the role of wind energy in the market place.
The troubled project has provoked a lot of reaction. The American Bird Conservancy praised Xcel Energy's pullout. The group cited government estimates that almost half a million birds die each year through collisions with wind towers.
In North Dakota, though, wind energy supporters are unhappy. A member of the North Dakota Public Service Commission says he's going to ask enXco and Xcel Energy to explain what's going on.