© Reuters. FILE PHOTO: Citigroup Inc logo seen at SIBOS Banking and Financial Conference in Toronto
By Liz Hampton
(Reuters) – Canadian renewable energy company sued on Wednesday Citigroup Inc (NYSE 🙂 for rejecting force majeure claims during a winter storm in February and billing it over $ 100 million for alternative energy, according to lawsuits in a state court in Texas.
Shannon Wind and Flat Top Wind, subsidiaries of Innergex Renewable Energy Inc, operate wind farms in North Texas that shut down their turbines during a deep frost in the Arctic. The two had agreements to physically supply electricity to Citi Energy, a unit of Citigroup Inc, at fixed prices.
Unusually freezing temperatures destroyed nearly half of the state’s power plants in mid-February, leaving 4.5 million people without heat or lights for days and bankrupting at least three companies over wholesale prices high electricity.
The wind companies, partially owned by Starwood Energy Group Global and BlackRock Inc (NYSE :), respectively, have declared force majeure after their turbines froze. But, according to their lawsuits in Harris County District Court, Citi ignored the statements and billed them for the electricity it was buying at inflated prices.
Citi declined to comment and Starwood did not have an immediate comment. BlackRock and Innergex did not immediately respond to requests for comment.
Citi billed Shannon Wind $ 39.5 million for four days of electricity and Flat Top Wind $ 79.3 million for seven days of electricity, according to complaints filed in Harris County District Court, in Houston.
The bills represent more than their projected income for the entire year, the lawsuits said, saying Citi Energy was “unduly in default”, and is on the verge of blocking both projects.
The lawsuits have asked the court to prevent Citi Group from taking further action after wind companies were told they had until Friday to pay their bills.
Citi billed for replacement electricity at $ 9,000 per megawatt hour, compared to about $ 22 to $ 26 per megawatt hour under their contracts.
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