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Federal court rejects Rock Energy lawsuit

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FRANK J. SCHULTZ
December 29, 2009
— A federal court has thrown out a lawsuit over a dispute between Rock Energy Cooperative and the village of Rockton in northern Illinois. The dispute is likely to continue in an Illinois state court.

The dispute is over the electric and natural gas distribution systems owned by Janesville-based Rock Energy.


Rock Energy acquired the systems from Alliant Energy in 2007. The area includes 6,300 natural gas and electric meters in Rockton.


Village officials claim that an April 2005 referendum authorizes them to acquire those systems.


Rock Energy and the village also had entered into a memorandum of understanding about the village’s possible purchase of the systems.


Rock Energy filed suit in federal court for the Northern District of Illinois last spring, saying Rockton did not have the authority to buy the systems, in part because the referendum wording was flawed.


The wording published before the vote asked for authority to spend $35 million, but the dollar amount shown on the ballot was $48 million, Rock Energy said.


Also, Rock Energy pointed out that the referendum authorized the village to acquire the assets of South Beloit Water, Gas & Electric, an indirect subsidiary of Alliant Energy that was dissolved when Rock Energy bought the systems.


In a decision to dismiss the case filed Dec. 22, the federal court said it was not the proper venue to decide the issues, but the court’s decision suggested that Winnebago County Court was the proper venue and noted that a similar case is in progress there.


The village filed the lawsuit in county court, aiming to force Rock Energy to negotiate the sale after Rock Energy filed in federal court. The memorandum of understanding states that disputes should be settled in the county court.


The county judge put the case on hold pending the outcome of the federal case, Rock Energy spokeswoman Barb Uebelacker said Monday, so it appears the dispute will now move to the local court.


In a statement, Uebelacker said Rock Energy disagrees with the federal court but welcomes the court’s acceptance of many of the facts as Rock Energy presented them.


The federal court ruling points the way to the county court, “given that there already is a similar case pending before that court between the same parties and based on the same set of operative facts.”


Rock Energy is a nonprofit, member-owned cooperative that distributes electricity and natural gas to about 26,000 meters in nine counties. Most of its service area is in rural Rock County.



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