LANSING — Three natural gas turbines the Lansing Board of Water and Light spent $50 million for two years ago are broken more often than not, according to a lawsuit filed by the publicly owned utility against manufacturer Siemens Energy.
BWL said in the complaint that it has been billed “tens of millions of dollars for repair work” due to “defects and failures in the compressors.” BWL’s attorneys added the changes had not been tested or proven in cold climates.
BWL accuses Siemens of a “bait and switch” that it says included turbine modifications to generate more power than the normal units, in order to meet BWL’s requirements.
The turbines are the “lynchpin” of the utility’s $500 million, natural gas-fired Delta Energy Park which went online in 2022, according to the lawsuit. It replaced the now shuttered coal-fired Erickson Power Station. Delta Energy Park generates 250 megawatts of electricity.
Officials said when the Delta Energy Park opened that its construction was fundamental to the area securing manufacturing investments, such as a $2.5-billion battery cell manufacturing facility Ultium Cells LLC, a joint venture between General Motors Co. and LG Energy Solutions Michigan Inc., was announced in January 2022.
The Ultium plant has not yet opened, and it was not immediately clear Friday whether the problems with the turbines will impact BWL’s ability to provide power to the plant and other customers.
A Siemens spokesperson said in a statement Friday that the company “denies the allegations, has been working with the Lansing Board of Water and Light to address its concerns and will continue to do so, even as we vigorously defend this lawsuit.”
The State Journal left a request for comment with a staff member for one of the attorneys with the Bloomfield Hills-based Dykema Gossett firm representing BWL.
BWL spokesperson Amy Adamy said in a statement the plant is fully operational.
“Currently, the plant is fully operational,” Adamy said. “While we do have a business dispute with Siemens, we look forward to resolving our differences. We are unable to comment further on this pending litigation.”
The utility said in its complaint it purchased the turbines because Siemens said the units could meet BWL’s power generation requirements, citing similar units that were 99.4% reliable and that hundreds of the turbines were working elsewhere.
The problems for BWL included a gearbox failure in April 2022, soon after the turbines began to run, in one unit that led to restrictions on how all three units were used, according to the lawsuit. The gearboxes were replaced by less efficient units that now operate at higher temperatures, according to BWL. The utility alleges there are “design flaws involving systemic ambient cold weather operational issues.”
Other problems detailed in the lawsuit included compressor failures, cracks in exhaust flow shields and at least one of the turbines cannot work as a “rapid start” peak demand unit, as the utility expected.
“Since Delta Energy Park opened in 2022, the CTGs (combustion turbine generators) have been down more than they have been running, and have never operated for more than nine weeks at a time,” BWL’s attorneys said in the lawsuit filed May 1 in Ingham County Circuit Court. “Siemens has attempted a number of temporary ‘fixes’ that have failed to correct the fundamental problems with the CTGs.
“The fixes are untested and unproven; do not remedy the defects; increase downtime and impose operational restrictions; materially degrade the performance, efficiency, and reliability of the CTGs; and do not provide BWL with the benefit of its bargain.”
The utility said that from the start of the operation in March 2022 through January 2023, one turbine was unavailable for five months and had below 70% availability for the other nine months. Another turbine was down for three months and had 70% availability for eight months. In January 2023, the utility began to ask Siemens for records about the research the manufacturer had done on the turbines and the utility alleges Siemens ignored those requests and “refused to allow BWL access to such documents.”
“Siemens falsely represented to BWL that the CTGs (combustion turbine generators) had millions of hours of reliable operations in the field, when in reality the references Siemens induced BWL to rely upon were different from and could not be used to validate the CTGs that Siemens sold to BWL,” attorneys said in the lawsuit.
BWL, which has around 100,000 electric customers and nearly 60,000 water customers, alleges breach of contract among other causes for its legal action and requests a trial.
Contact Mike Ellis at mellis@lsj.com or 517-267-0415
Read More: BWL says $50M turbines to generate electricity are faulty, sues Siemens