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Federal judge orders change of ownership for Chicago-area charging stations

CEO of Arlington Heights-based company says hurdles remain before system will be operational

By Julie Wernau, Chicago Tribune reporter
7:55 p.m. CDT, September 25, 2013

Electric-vehicle owners in the Chicago area may get to start using a long-stalled car-charging network by early next year, the network's new owner said Wednesday.

A federal judge Tuesday ordered that the charging stations be turned over to Arlington Heights-based JNS Power and Control Systems Inc., an electric contractor that had been locked in a battle for control of the network with a Miami Beach, Fla., company. JNS installed about 40 percent of the stations.

Michael Farkas, chief executive of Car Charging Group, which had been vying for the network, said in an email that he intends to appeal the ruling.

The network's previous owner, 350Green, had hatched deals with Car Charging Group and JNS to take over the charging stations this spring. That spawned legal maneuvering by JNS and Car Charging Group against one another in federal court in Chicago.

Since then, the judge had been trying to sort out who owned the Chicago project. The judge determined that the deal with Car Charging Group had expired and that 350Green was free to enter into the agreement with JNS.

Said Peter Scales, spokesman for the Chicago Department of Transportation: "We are pleased that this dispute has been resolved, and are looking forward to continuing to build a strong vehicle-charging network throughout the region."

Brian Howe, chief executive of JNS, was pleased with the court's ruling but said he has other hurdles to contend with before he can get the charging stations operational.

Howe said 350Green had turned over leases, passwords, revenue-sharing agreements and other crucial information to Car Charging Group. Now, JNS has to begin the process of trying to get that information.

Howe also said he needs to renegotiate agreements with dozens of contractors. At the time Chicago's network went into default, 350Green owed contractors, including JNS, about $4 million.

Howe said he envisions that a network would work like Chicago's recently installed Divvy bike-sharing system. Consumers, he said, would have the option of paid subscriptions or paying one-time user fees.

"It's going to be accessible to the people who join our network. And people who aren't on it will be able to pay an hourly rate," Howe said.

350Green had received $1.9 million in federal and state grants to build the network. But in April 2012, Chicago terminated the grant agreement because of allegations the company had submitted a check showing it had paid contractors when it hadn't. Tim Mason, chief executive of 350Green, blamed the incident on an accounting mix-up.

The FBI searched 350Green's Los Angeles offices in July 2012, looking for evidence of wire fraud, according to a copy of the search warrant that is part of the record in the Chicago case. The Tribune has reported that the city of Chicago, which provided oversight of the grant money, can't account for $798,000 that was paid out.

So far, 168 charging stations have been installed; many don't work or can't be accessed. An additional 51 stations are to be built. The situation with the network, which was supposed to be operational two years ago, has frustrated owners of electric cars.

"This system is essentially crippled," said Paul Fine, a Chicagoan who wants to buy an electric vehicle but said his attempts to try quick-charge stations have failed. Because ownership of the network was in limbo, Fine said, he couldn't purchase a card to access them.

"I'd really like to drive to Six Flags, which is not that far away," said Nissan Leaf driver Brian McKee. "There's a quick charger on the tollway on each side. But I have no way to verify if either of them are up."

Tim Healey, a senior writer at auto website Web2Carz.com, said last month he was test driving a Nissan Leaf electric car when the battery ran down to nearly a zero charge because one charging station he visited was out of service and another couldn't be accessed. He said he was on his way to the Arlington racetrack but instead wound up stranded nearly 9 1/2 miles away.

"The charging stations should have worked," he said.

Politicians and others were hoping for consumer buy-in to showcase Illinois as a leader in the adoption of electric vehicles.

"Like anything, there's bumps along the way, but we're pushing forward," said Amy Francetic, executive director at Clean Energy Trust, a member of the Illinois Electric Vehicle Coalition.

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