Act Now To Preserve Your Section 1603 Grant

Overview


In Depth


We recently reported that on October 31, 2016, the US Court of Federal Claims issued its opinion in Alta Wind I Owner v. United States, in which the court determined that the value of the property eligible for the grant included the value of the power purchase agreements (PPA) associated with the facilities, and awarded an additional $206 million to the applicant.

This case will likely have very important ramifications to taxpayers who have either: (1) applied for the Section 1603 grant and received less money than anticipated; or (2) did not seek the full amount of the grant based upon Treasury’s guidance. In either case, if you have applied for a Section 1603 grant, you should consider your options.

What Should You Do Now?

We do not know if the government will appeal its loss in Alta Wind. Moreover, the statute of limitations may be expiring on your ability to seek reimbursement under the reasoning in Alta Wind. Strategically, it may make sense to file suit immediately in the Court of Federal Claims to put your case in the most positive position for resolution. Or if you never claimed the full amount of the grant, you may need to amend your application to do so.

Alta Wind is a significant decision, and is welcomed guidance to the renewable energy industry affirming its long-held view that the appropriate measure of cost basis in the context of the Section 1603 grant includes the value of a related PPA.