The Star Beacon; Ashtabula, Ohio

January 19, 2013

Balky Conneaut turbine costing NexGen millions, according to lawsuit

Star Beacon

CONNEAUT — A 600-kilowatt wind turbine erected in early 2010 at Conneaut Middle School rarely operated properly and has cost its owner, NexGen Energy Partners, plenty of money, according to a lawsuit working its way through Ashtabula County courts.

NexGen, located in Boulder, Colo., is suing the turbine’s manufacturer, alleging the generator did not meet some stringent specifications. A jury trial on the matter, originally set for March, has been moved back to November and will be heard in the courtroom of County Common Pleas Court Ronald Vettel, according to documents.

Earlier this week, Conneaut Board of Education members complained about the long-inactive turbine, which was expected to provide 40 percent of the electricity used by the middle school. Because of the turbine’s presence, the school was bypassed when other buildings recently received energy-efficiency upgrades. Board members are wondering if the district should pull the plug on the turbine and pursue other energy-saving options.

Ron Abramson, NexGen chairman and chief executive officer, said this past week the school turbine probably won’t be revived until the lawsuit is resolved.

“Not in the immediate near term,” he said in a telephone interview. “We’re 100 percent committed to getting the turbine operational.”

In the complaint NexGen is seeking compensation from the turbine’s manufacturer, Elecon Engineering Co. Ltd., located in India. A co-defendant is Reflecting Blue Technology of Carson City, Nev., described in the lawsuit as Elecon’s agent and sales representative in the United States.

The turbine was erected in late December 2009 and became operational early the following year. Even after its launch, the big machine rarely worked properly, according to the lawsuit, which was filed in March 2011.

“It has not successfully achieved more than three weeks of continuous operation due to multiple design, manufacturing and supply failures,” NexGen alleges in the complaint.

NexGen has asked Elecon, without success, to buy back the turbine and make refunds where applicable, according to the lawsuit.

At issue is a product that ultimately failed to meet specifications, NexGen alleges. When the company was unable to buy turbines it wanted from the builder it preferred, it learned Elecon was a fully-licensed manufacturer of the same model. NexGen checked with its original builder and was told Elecon had to meet very exacting standards to become a licensed supplier, according to the lawsuit.

NexGen bought three of Elecon’s 600-kilowatt turbines for $2.66 million, according to the lawsuit. One was erected immediately in Conneaut while the other two were put into storage in the Cleveland area, court documents said. NexGen invested another $1.84 million to erect the Conneaut turbine and hook it up to the middle school, according to the lawsuit.

Problems with the turbine began soon after its construction. NexGen soon learned Elecon had made “unauthorized modification” to some of the specifications of the generator, according to the lawsuit.

Because of turbine problems, NexGen “lost more than $100,000 in customer revenue” during a 12-month period beginning March 2010, according to the lawsuit. The middle school is one of the customers, agreeing to buy power produced by the turbine for 10 years starting in 2010.

Moreover, the other two turbines purchased by the company have not yet been assembled, the company alleges.

The entire episode has been frustrating, Abramson said. “The project has been riddled with problems from the get-go. It hasn’t turned out well for anyone.”

NexGen is hoping the lawsuit can be expedited, Abramson said.

“I hope the court system can put it on (a faster track),” he said. “We have an enormous financial investment in the turbine.”

At about the same time the school turbine was built, NexGen erected a smaller, 400-kilowatt turbine at Conneaut’s sewage treatment. That generator has not seen any mechanical problems, officials have said.

“That one has a different manufacturer,” Abramson said.