Law360: Texas High Court Mulls Wind Energy Credit Penalties


A predecessor of NextEra Energy Inc. told Texas’ highest court Monday it should not have to pay $29 million under a contract for renewable energy with an Energy Future Holdings Corp. unit, saying a lower appeals court had misinterpreted the agreement.

On behalf of the predecessor, FPL Energy LLC, attorney Nina Cortell argued that a liquidated damages provision in the agreement applied to underdelivery of renewable energy credits — not electricity — and that the Energy Future subsidiary, now known as Luminant Energy Co. LLC, had caused FPL to miss delivery targets by clogging transmission lines.

“In this case of significance to the renewable energy industry, the court of appeals misunderstood and misconstrued key industry and contract terms, and that led it to wrongfully, erroneously enforce a highly punitive liquidated damages provision, and it also led the court to misallocate the risk associated with transmission congestion,” Cortell said...

FPL is represented by Cortell, Anne M. JohnsonBen L. Mesches and Ryan Paulsen of Haynes and Boone, LLP and Jeffrey M. Tillotson and John Volney of Lynn Tillotson Pinker & Cox LLP. 

Excerpted from Law360, October 16, 2012. To view full article, click here (subscription required).

An additional article on this case can be found on Texas Lawbook, October 16, 2012. To view full article, click here (subscription required).


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