The stakes are getting higher for a Bedford renewable energy company to deliver wind-generated electricity on time.
Shear Wind Inc. has posted a $1.5-million security deposit to Nova Scotia Power to deliver the green power to the utility by the end of this year, according to documents filed with securities regulators Friday.
Shear Wind says it has agreed to the performance security deposit as part of its contract with the utility to provide 60 megawatts of green electricity by Dec. 31 from its proposed $170-million Glen Dhu wind turbine park near New Glasgow.
The commitment was made as of the end of November 2009, according to the documents.
This latest news comes just weeks after Shear Wind revealed it had to pay a $500,000 performance security deposit held by Nova Scotia Power for not delivering 20 megawatts of wind-generated electricity by Nov. 30.
The company had to forfeit the cash based on a contract it signed with the utility in April 2008, it reported in documents.
Shear Wind was delayed in starting its Glen Dhu wind turbine park because of the collapse in the world credit markets in 2008.
The company, like many others, was unable to borrow the money to finance the project.
According to other wind power developers who signed contracts with Nova Scotia Power, the security deposit is based on $25,000 per megawatt.
This was tough news for a company that has incurred significant losses over the last three years, including a $628,182 loss last year, according to company documents.
Mike Magnus, Shear Wind president, said Friday the company is about to "turn the corner" on its Glen Dhu project and should have an announcement shortly on purchasing turbines.
As of the end of November, the company has spent $1,992,044 with respect to land controlled in Nova Scotia.
Shear Wind continues to incur losses, according to its most recent financial statements.
The company is reporting a loss of $357,283 for the three-month period to the end of November 2009, compared to $662,397 for the same period in 2008.
The decrease in the loss is being attributed to a decrease in salaries and benefits, according to the management discussion and analysis filed with regulators Friday.
As of the end of November 2009, the company had total assets of $32,819,443, compared to $9.1 million at the end of August 2009.
The company’s overall assets improved at that time with the infusion of $27 million by a Spanish billionaire into the company in return for a majority stake.
Shear Wind, a publicly traded company formed in 2004, is holding its annual meeting Feb. 10 at the Halifax Club.
Shareholders will also be asked to approve a new nominee to the board of directors from the Spanish company, Inveravante. Jose Fernandez Olano, who spearheaded the acquisition of Shear Wind, has been nominated.
Shear Wind has a range of wind farm projects in various feasibility and development stages in Nova Scotia, New Brunswick and Alberta.
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