BG&E subsidiary sues partner in Hawaiian project

December 11, 1992|By Ross Hetrick | Ross Hetrick,Staff Writer

A subsidiary of Baltimore Gas and Electric Co.'s unregulate division is suing its partners in a Hawaiian geothermal power plant for $10.9 million, charging they failed to pay their share of the project's cost.

The lawsuit, filed Dec. 4 in U.S. District Court in Wilmington, Del., names AMOR VI Corp. and AMOR VIII Corp., two subsidiaries of OESI Power Corp., which is a builder and operator of geothermal plants based in Lake Oswego, Ore. The suit was brought by CE Puna LP, a subsidiary of Constellation Holdings Corp., BG&E's non-regulated operation.

The proposed 25-megawatt plant, which is being built on the island of Hawaii, has been delayed for more than a year because of technical, regulatory and political difficulties, according to Douglas S. Perry, vice president and general counsel for Constellation in Baltimore.

This has increased the cost of the project and OESI Power has been unable to pay its share of the additional expense because of its own financial difficulties, Mr. Perry said.

OESI Power lost $7.8 million in the first nine months of the year, according to company reports. The company had a profit of $495,000 in 1991, primarily because of an accounting change. Officials at OESI Power did not return phone calls yesterday seeking comment.

The suit was filed primarily to protect BG&E's interests in the Hawaiian project, Mr. Perry said. There are also continuing discussions with OESI about restructuring the ownership of the project, he said. BG&E's CE Puna unit owns 49 percent of the project.

Despite its various problems, BG&E expects to complete the project by summer. "We're clearly committed to the project," Mr. Perry said. Constellation is involved in 24 power plant projects.

The power plant, which taps the energy of superheated subterranean brine, will cost about $150 million to complete. The power is to be sold to the Hawaiian Electric Co.

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