Henderson power generator sues supplier

Wednesday, April 25, 2001 | 11:19 a.m.

A Henderson power plant sued to recover $429,000 in claimed damages from its natural gas provider, Burlington Resources Trading Inc., after the plant was forced to purchase replacement gas when the gas provider allegedly failed to deliver the contracted amount of gas in December.

Saguaro Power Co., which said it sells all of its electrical output of about 90 megawatts to Nevada Power Co., sued Houston-based Burlington in U.S. District Court, alleging the gas provider refused to reimburse Saguaro for replacement gas it bought allegedly at prices much higher than the contract price.

The suit said Burlington claims, in response to Saguaro's demands for reimbursements, that its failure to deliver the daily gas volumes contracted by Saguaro in December can be "excused" because of alleged pipeline curtailments.

But Saguaro disagreed, saying Burlington's failure to perform in December was a bad faith attempt to "get out" of its contractual obligations to deliver below-market-price gas to Saguaro that could otherwise be sold on the open market at much higher market prices.

John Carrara, Burlington's spokesman, declined comment on Saguara's allegations.

But Burlington had filed a lawsuit against the power plant on March 20 in Texas, alleging the gas shortages Saguaro suffered were due to its decision to enter into a "risky fixed commitment" to buy gas from another supplier, Coral Energy, knowing that gas transportation on the delivering pipeline is routinely curtailed.

Burlington's suit said the shortages were also caused when Saguaro changed the delivery points for its gas in December.

But Edward Anibal, Saguaro Power's executive director, disputed the charges. "We entered into a contract with Coral Energy because of the possibility we could not get gas deliveries through Burlington."