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IRS PLR Rules that Company that Sells Percentage of Solar Power Generated is Not a Public Utility Company

Monday, November 16, 2020 - 4:00PM

A private letter ruling (PLR) from the Internal Revenue Service (IRS) states that a company is not a public utility company, since it provides a percentage of renewable energy generated through long-term solar energy service agreements for solar photovoltaic systems on the customer’s premises that are owned by the company. In PLR 202046007, the IRS ruled that since the customer is entitled to a percentage of the energy generated in exchange for a monthly fee, the company not a public utility property under the meaning of three requirements of Internal Revenue Code Section (IRC) 168(i)(10). The IRC identifies public utility properties as those where rates are determined on a rate-of-return basis. The ruling concludes that the company is therefore not subject to the regulatory jurisdiction of any state or federal regulatory body. The PLR is directed only for the taxpayer that requested it.

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