(Adds Spanish policy changes in fifth paragraph.)
March 21 (Bloomberg) -- NextEra Energy Capital Holdings Inc., a unit of NextEra Energy Inc., sued banks including Banco Bilbao Vizcaya Argentaria SA to clarify its financing obligations to solar power projects in Spain.
NextEra Energy, the largest U.S. wind-power operator, sued 16 banks yesterday in Manhattan federal court, asking a judge to interpret a 2011 credit “guarantee agreement” in light of recent changes in Spanish law.
NextEra said Spain enacted favorable tariff laws in the 1990s to encourage investment in solar power so that by 2008, the country accounted for more than 40 percent of the world’s solar installations.
Those tariff laws were changed, directly affecting NextEra’s obligations under the guarantee agreement, the company said. The changes trigger a limit on NextEra’s base equity contribution to the projects, the company alleged in its complaint.
Spain has approved at least four damaging measures for solar-plant owners since late 2010 as part of efforts to limit rising subsidy payments for renewable energy. Two years ago it cut the number of years and annual hours eligible for subsidized rates, reducing plants’ earnings. Last September it introduced a 6 percent tax on their revenue and last month it reduced the rates’ annual rises to account for inflation.
The banks, which provided financing for the projects, dispute the company’s interpretation of the agreement, NextEra said. NextEra asked the court to find that the change of law caps its obligation under the agreement.
NextEra, based in Juno Beach, Florida, were unchanged at 11:17 a.m. in New York Stock Exchange composite trading. The shares had gained 9.4 percent this year before today.
The case is NextEra Energy Capital Holdings Inc. v. Banco Bilbao Vizcaya Argentaria SA, 13-cv-01873, U.S. District Court, Southern District of New York (Manhattan).
--With assistance from Marc Roca in London. Editors: Glenn Holdcraft, Andrew Dunn