Lawsuit: Kahuku Windfarm May Never Get its Turbines Repaired

Hawai'i Free Press

Sunday, November 11, 2012

Lawsuit: Kahuku Windfarm May Never Get its Turbines Repaired
By Andrew Walden @ 8:38 PM :: 16474 Views :: Energy, Tax Credits

by Andrew Walden

Kahuku, Hawaii’s largest windfarm, is suffering yet another setback. As readers may remember, a confidential June, 2009 report by representatives of wind developer First Wind and wind turbine manufacturer Clipper Liberty raised questions about Clipper Liberty wind turbines sited in dozens of wind farms across the United States. Twelve Clipper Liberty turbines were installed in 2010 and early 2011 at the Kahuku Wind Farm at the northern tip of Oahu.

(Kahuku is also the site of a three-day August, 2012 battery fire which spewed lead across the ‘aina and completely destroyed Kahuku’s multi-million dollar taxpayer funded battery storage system. This was the third battery fire at the site. Even before this latest fire, Kahuku’s battery disaster was the subject of a Texas lawsuit.)

Recent developments reduce the chances that First Wind will ever be able to repair the defective turbines which were supposed to power the burned batteries at Kahuku.

Calling Clipper a disaster in which it was unwilling to make further investment, United Technologies, in early August, 2012, unloaded Clipper to Beverly Hills based ‘Platinum Equity’. Platinum immediately laid off 174 employees. Now First Wind is suing Clipper in Iowa and California courts. Here is the story from the November 3, 2012 Cedar Rapids Gazette:

Customer seeking to freeze Clipper Windpower assets, including Cedar Rapids factory

Lawsuit says company accepted $59.5 million for turbines

by Dave DeWitt (excerpts)

Wind project developer and owner First Wind Energy LLC said Clipper accepted $59.5 million in advance payments for wind turbines it no longer produces in the lawsuit filed last month in Linn District Court in Cedar Rapids (Iowa).

Clipper manufactured its huge Clipper Liberty 2.5-megawatt wind turbines in Cedar Rapids from 2006 until earlier this year…. (These are the turbines installed at Kahuku.)

Warranty claims, according to the lawsuit, have been a huge financial problem for Clipper Windpower. The company’s previous owner, United Technologies Corp., indicated it was setting aside $91 million to pay for warranty claims on Clipper’s products.

First Wind, based in Boston, said the undelivered turbines and related issues are now part of an arbitration proceeding in Chicago. It is seeking a writ of attachment on Clipper’s Iowa assets because it is worried that Clipper Windpower will dispose of them, making it impossible for First Wind to collect any award it receives in arbitration….

Clipper began producing turbines in Cedar Rapids in 2006. The lawsuit claims that as early as early as March 24, 2008, because of Clipper’s financial difficulties, First Wind and another customer had to provide secured financing to Clipper so that it could meet its repair obligations.

The lawsuit also details difficulties by First Wind in trying to obtain project financing for wind development in which it planned to use Clipper Windpower turbines because of Clipper’s financial instability….

“By May 2012, First Wind was informed by Clipper that it had ceased all manufacturing of wind turbines and had no intention of resuming manufacturing them,” the lawsuit said.

First Wind has purchased 150 of the 2.5-megawatt Clipper wind turbines since 2006, according to the lawsuit. The importance of having Clipper continue to honor parts, service and maintenance agreements on the turbines is one of the critical concerns for First Wind and other Clipper customers….

Clipper is facing a similar lawsuit to freeze its assets in California courts. Much of that lawsuit in Santa Barbara Superior County Court is under seal, according to the Pacific Coast Business Times….

Law 360: Wind Turbine Maker Looks To Secure $60M Arbitration Award

2009 OMNIBUS AGREEMENT First Wind / Clipper New York (Redacted Kahuku purchase agreement)

· Aug 8, 2012: UTC sells Clipper Windpower to US private equity group

· Aug 23, 2012: Clipper Windpower Lays Off 174 Employees

· Sept 6, 2012: First Wind Sues Clipper Windpower

· Nov 3, 2012: First Wind seeking to freeze Clipper Windpower assets

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Kahuku, The Record:

· Xtreme Power: A Pig-in-a-poke For Hawaii Wind Farm

· Confidential Memo: Wind Turbine Model Installed at Kahuku has Structural Problems

· Clipping lots of Birds: Hawaii Windfarms killing endangered Birds: After five years Mitigation Lags

· Guess Who’s Paying: Mafia-Connected FirstWind Got $117M in Federal Loans for Kahuku Windfarm