A New York judge refused to issue an injunction protecting a West Texas wind farm against the alleged risk of a takeover by Citigroup Inc. over a $113 million bill stemming from the winter storm that swept the state in February, WSJ Pro Bankruptcy reported. Justice Robert R. Reed of the Supreme Court of New York ruled against Stephens Ranch Wind Energy LLC, which had sought to prohibit Citi from taking action against the wind farm based on its alleged default under a power-purchasing contract with the bank. The ruling highlights the challenges facing the vast Texas wind industry after the historic winter storm and resulting electricity crisis. Power prices soared, leaving many wind farms deep underwater on deals with banks and hitting power retailers, municipal utilities and other market participants with huge bills too. Many wind farms in Texas, to get construction financing, enter into long-term hedged contracts with financial institutions in which the operator agrees to provide a steady stream of electricity to the counterparty. Citi said it had to buy electricity itself, at vastly elevated prices, when Stephens Ranch failed to deliver and sent the wind farm an invoice for $113 million. Stephens Ranch sued, saying it couldn’t be held responsible for the unexpected storm and the resulting spike in energy prices.
