Battle over Curtailments Involving Commercial Wind Facility Is State Law Breach of Contract Case.

The plaintiff operates a large-scale wind energy generation facility in Kansas.  The defendant is a rural electric cooperative.  The parties are subject to a Renewable Energy Purchase Agreement (REPA) that establishes the terms and conditions of sale of energy between the parties.  Due to inadequate transmission capabilities and the relatively higher cost of energy production via wind, the grid operator did not allow the plaintiff to put power on the grid at various times between March 2012 and August 2014 and, as a result, the plaintiff lost nearly $2 million in revenue due to the reduced sales of energy and the loss of tax credits.  Under the terms of the REPA, the defendant was to pay for curtailment losses that are economic and the plaintiff bears the burden with respect to emergency curtailments.  The parties did not dispute that economic curtailments were at issue.  However, the defendant maintained that the matter involved a question of federal law, but the court determined that was only the case if an emergency curtailment was at issue, which it was not.  Thus, the case involved a matter of breach of contract to be resolved in state court.  The court did not allow, however, the plaintiff’s request for costs, expenses and attorney fees.  Smoky Hills Wind Farm, LLC, et al. v. Midwest Energy, Inc., No. 6:15-CV-1116-JTM-KMH, 2015 U.S. Dist. LEXIS 80365 (D. Kan. Jun. 22, 2015).

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