Texas wind farms sue Citigroup over charges from winter storm
Citi billed for replacement power at $9,000 per megawatt hour
A Canadian renewable energy firm on Wednesday sued Citigroup Inc for rejecting force majeure declarations during a February winter storm and billing it over $100 million for replacement power, according to lawsuits filed in a Texas state court.
Shannon Wind and Flat Top Wind, subsidiaries of Innergex Renewable Energy Inc, operate North Texas wind farms that halted their wind turbines during an arctic deep freeze. Both had agreements to physically deliver power to Citi Energy, a unit of Citigroup Inc, at fixed prices.
Unusually frigid temperatures knocked out nearly half of the state's power plants in mid-February, leaving 4.5 million people without heat or light for days and bankrupting at least three companies due to high wholesale power prices.
COULD TEXAS BLACKOUTS BECOME A NATIONWIDE REALITY?
The wind firms, partly owned by Starwood Energy Group Global and a fund run by BlackRock Inc respectively, declared force majeure after their turbines froze. But, their lawsuits in Harris County District Court claimed, Citi ignored the declarations and invoiced them for electricity it bought at inflated prices.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| C | CITIGROUP INC. | 70.16 | +0.42 | +0.60% |
| BLK | BLACKROCK INC. | 1,019.00 | -7.50 | -0.73% |
Citi and BlackRock declined to comment, and Starwood did not have an immediate comment. Innergex did not immediately respond to a request for comment.
Citi billed Shannon Wind for $39.5 million for four days of electricity, and billed Flat Top Wind for $79.3 million for seven days of electricity, according to the suits filed in Harris County District Court, Houston.
CLICK HERE TO READ MORE ON FOX BUSINESS
The invoices represent more than their projected revenues for the entire year, the lawsuits said, claiming Citi Energy "improperly defaulted," and is poised to foreclose on both projects.
The lawsuits asked the court to prevent Citi Group from taking further action after the wind companies were advised that they have until Friday to pay their invoices.
Citi billed for replacement power at $9,000 per megawatt hour, versus the roughly $22 to $26 per megawatt hour under their contracts