Several Minnesota farmers are out hundreds of thousands of dollars after they say a wind energy developer failed to keep its promises when installing small-scale wind turbines on their property.
The company, Renewable Energy SD, was named in a lawsuit filed Friday by Attorney General Lori Swanson. According to the lawsuit, the company told farmers the wind turbines would pay for themselves through federal grant money from federal stimulus that Congress passed in 2009 and a state electricity buy-back law.
But many of the farmers had their wind turbines malfunction, and the company has failed to fix or replace the malfunctioning equipment, the farmers allege in the lawsuit. In other cases, the turbines haven't delivered the power the company promised, the farmers said.
Although the company is based in South Dakota, its president, Shawn Dooling, lives in Minnesota. Reached on Friday, Dooling said he is still reviewing the lawsuit and had no immediate comment.
Swanson said that Dooling has bought several expensive cars, such as a 2010 Ferrari, since entering agreements with the farmers, and that both his name and his company's name are on the cars' titles.
Late Friday afternoon, the company released a statement: "We have received the Complaint and are reviewing the allegations. RESD's commitment is to its customers and we will address any concerns that they may have. RESD looks forward to having a meaningful discussion with the Attorney General's Office so that we can continue to pursue our mission of making clean, renewable wind energy available throughout Minnesota and across the Upper Midwest."
Several farmers who are part of Swanson's lawsuit attended a news conference on Friday.
"We're frustrated," said Harlan Jacobson of Ashby, Minn., who said he spent $82,000 on a wind turbine and was told the federal grant would take care of the rest. Jacobson said he started working with the company in March 2010. When the turbine was finally installed in December 2010, it didn't work, he said.
Even though the company had promised to service the turbine, Jacobson said officials did not keep their word and so last April, he hired his own contractor to fix it. While the turbine is now working, it's only bringing in up to a quarter of the $800 in monthly revenue the company had promised, he said.
"It's produced a little bit, but hardly enough to pay the maintenance that we've taken out of our own pocket to make it work," he said.
Marvin Jensen of Kensington, Minn., said he paid $245,000 for a turbine three years ago and is still waiting.
"Wind turbines work. It's just that we got in with a real shady outfit," he said. "What it amounts to is I've got a $200,000 deer stand."
Swanson said 15 farmers are part of the lawsuit and said her office is still getting complaints about the company. She said at least four other farmers have already filed and settled lawsuits with Renewable Energy SD on their own.
"A lot of these people, when they first started experiencing problems, they said, 'Could I have a refund?'" Swanson said. "They were told, 'No, you can't have a refund, you can double the investment and buy something else.' ... At the same time, assets were being acquired that I think most people would consider to be lavish."
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