7. In 2011, First Wind contracted with Xtreme Power Solutions LLC ("Xtreme"), a designer and manufacturer of energy storage and power management systems for power producers, utilities, and commercial end uses, for the manufacture of ten Dynamic Power Modules ("DPMs") for use at the Kahuku Wind Farm. The DPMs are critical components of First Wind's energy storage system, absorbing excess power or providing supplemental power, depending on the strength of wind gusts supplying the farm.
8. To complete the DPMs for First Wind, Xtreme purchased ten specially- designed inverters from Dynapower that contained capacitors manufactured by ECI. The ten inverters were installed in ten DPMs, which were housed in a building specially constructed by First Wind for the DPMs.
9. On March 1, 2011, the Kahuku wind farm went online. On April 22, 2011, one of the inverters caught fire, destroying one of the DPMs and damaging nearby equipment and fixtures.
10. On May 23, 2011, a second inverter caught fire. This fire destroyed a second DPM. First Wind suffered lost energy due to outages and derates following the May 23, 2011 fire.
11. Following the May 23, 2011 fire, First Wind submitted a claim to UNDERWRITERS under Section 5 (Operational Business Interruption) for business interruption losses that it suffered as a result of the May 23, 2011 fire.
12. UNDERWRITERS have made payments in excess of $2,000,000 to First Wind under Section 5, reimbursing First Wind for its losses that it sustained following the May 23, 2011 fire.
13. An investigation of the April 22, 2011 and May 23, 2011 fires identified the ECI capacitors contained in Dynapower's inverters to be the cause of the fires. The investigation determined, inter alia, the following:
- the fire patterns in the DPMs show that the fire started in the capacitor area of the cabinets;
- the materials used in the capacitors supplied by ECI were combustible;
- new capacitors manufactured by ECI were shown to have had manufacturing defects;
- the capacitors supplied by ECI were operating with a large spread in their operating temperatures;
- there were observable defects in the capacitors manufactured by ECI;
- the design of the Dynapower inverters was not "sufficiently robust" to operate in the environment and certain design steps should have been implemented; and
- the ECI capacitors used by Dynapower were not properly rated for this application.