A hurdle confronting the Kauai Island Utility Cooperative in negotiating a potential purchase of the Kauai Power Partners generating plant at Kapaia from Dominion Resources is a million-dollar lawsuit filed in March in a California state court that alleges fraud
A hurdle confronting the Kauai Island Utility Cooperative in negotiating a potential purchase of the Kauai Power Partners generating plant at Kapaia from Dominion Resources is a million-dollar lawsuit filed in March in a California state court that alleges fraud and breach-of-contract by the company.
The plaintiff in the suit is Power Partners International, a San Diego-based energy consulting and project management company that helped win approval for the plant several years ago.
The suit is for just over $1 million and is against Dominion and related entities.
The suit asks the court to give about a 14 percent ownership of the plant to Power Partners International of San Diego if the million dollars isn’t paid.
There are also possible punitive and general damages, and attorneys fees, payable to the San Diego firm if they win in court.
An alternative dispute resolution proceeding begins next week, said John W. Howard, Power Partners’ attorney. If an agreement can’t be reached in front of a mediator, the case will go to trial two weeks later, he said.
Both sides would like to settle the dispute and avoid going to court. “I would love nothing more than to resolve this case short of trial,” said Howard, who is a trial attorney.
“There’s a question as to who really owns this (plant),” Howard said., saying the rescission request asks for Power Partners International to be given an interest in the Kapaia power plant, and, theoretically, a percent of the sale price should the unit sell.
Alton Miyamoto, KIUC president and chief executive officer, said co-op officials aren’t commenting on the suit as they could be drawn into it if they did.
KIUC officials won’t make a deal to purchase the power plant if plant ownership remains disputed, Miyamoto said.
Mark Lazenby, a Dominion spokesman, wouldn’t comment when asked if Dominion owns the KPP unit, or if Dominion has been negotiating with KIUC for the sale of the KPP unit. Lazenby also wouldn’t comment in detail on the lawsuit, and another that Dominion has filed in Pittsburgh against Power Partners.
“With that party, we have areas of disagreement. It’s not unusual in the development of an electric facility for parties involved in the development to find areas of disagreement,” he said.
“And it is often the case that these types of understandings and misunderstandings can be resolved. And we are hopeful that we will achieve resolution,” Lazenby said.
Regarding negotiations between KIUC and Dominion, Lazenby said it is company policy not to comment on, discuss, or confirm or deny ongoing business negotiations.
But it is company policy to continue divesting assets outside of the regions the company focuses on in its natural-gas and electricity operations.
Those regions are the Midwest, Northeast and Mid-Atlantic areas of the Mainland. “Dominion has divested itself, and is divesting itself, of non-core assets, and of energy assets not operating” in those regions, Lazenby said. Dominion is one of the nation’s largest natural gas and electric companies.
