Readers recalling that I’m going to pay attention to items a little closer to home might wonder why I find this snippet from a Business Week article interesting: “Suzlon Energy Ltd. (SUEL), the Indian wind-turbine maker seeking an extension on debt repayments, has filed a lawsuit against a unit of Edison International (EIX) claiming its improperly refusing to make a pre-payment for turbines supplied to a U.S. wind farm.”
Well, Edison Mission and Mineral County WV also have a financial agreement. The lawsuit from the Indian manufacturer lawsuit states, as part of the reason for Edison Mission not paying what is due, the “precarious financial situation of Edison.” Suzlon mentioned in the complaint that it is concerned the Edison unit may have to file for bankruptcy, a point I’ve addressed on this blog previously.
You see, our County Commissioners signed a Decommission Agreement for the eventual removal of the 23 turbines installed above Keyser, WV and the obligation to honor the agreement now rests, I assume, with Edison Mission, or one of it’s LLCs. That fact alone gives me pause, but the real problem with the decommission agreement, as I see it, and expressed to the Commissioners before they signed the agreement, is that the escrow set aside to remove the turbines after scrap value is considered is … wait for it … $0 dollars, except for a small percentage for administration fees.
At the time I suggested to the Commissioners that the shortfall could be as much as several hundred thousand dollars. After further consideration, I estimate the cost for transportation alone for items not adequately covered in the consultant’s assessment on which the escrow value was reached, may well put us in jeopardy to the tune of $750,000. That’s a lot of money, even in super wealthy Mineral County, WV!
So what happens if Edison Mission goes belly up? I don’t really know. I have a gut feeling that the Commissioners who signed this agreement even after being warned of the shortfall don’t know for certain.
I would be happy to be proven wrong … but so far I haven’t seen anything that gives me hope.