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As Citigroup well knows, the letter of the law is not always your friend when something unfortunate and unexpected happens, which is why it is out the half-billion dollars it mistakenly sent to some very mean hedge funds and others. Usually, however, it is (because you and your ilk have made sure the letters of the law are arranged favorably), and that is why Citigroup may be getting its hands on a sweet little wind farm in Texas, because while it may be as unusual if not more so than a $1 billion fat finger error, an ice storm that brings that nation’s second-largest state to its knees is also not legally unforeseeable.

Citi had hedge deals with Stephens Ranch, which operates 210 turbines with 376 megawatts of capacity and said it couldn’t deliver power to the bank as required during the cold snap when ice built up on turbine blades.

Citi said it had to buy electricity itself, at vastly elevated prices, when Stephens Ranch failed to deliver and sent the wind farm an invoice for $113 million. Stephens Ranch sued, saying it couldn’t be held responsible for the unexpected storm and the resulting spike in energy prices…. “The parties came to their agreement in the Texas arena where they knew that market fluctuations could be impacted by a regulatory fiat of agencies such that it would allow the price per megawatt hour to vary to great extremes,” the judge said.

He said that undermined the wind farm’s argument that the cold snap triggered an escape-hatch clause—known as “force majeure,” French for “superior force”—in the power contract.

There are just so many fun ways for Wall Street to get rich at the expense of shivering Texans.

Texas Wind Farm Denied Protection From Citi Over $113 Million Storm Bill [WSJ]

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