Renewable Energy Tax Credits News Briefs - October 2010

Friday, October 1, 2010

The Internal Revenue Service (IRS), in Announcement 2010-56, released the results of the 2009-2010 allocation round under Section 48A, the qualifying advanced coal project program, and Section 48B, the qualifying gasification project program. Section 48A investment tax credit allocations for phase two include $417 million to Christian County Generation LLC; more than $313.4 million to Summit Texas Clean Energy LLC; and $279 million to Mississippi Power Company for a total of more than $1 billion in investment tax credits (ITCs). Awardees under phase two of the gasification program are Faustina Hydrogren Products, with a more than $121.6 million allocation; and Lake Charles Gasification LLC, which received more than $128.3 million in ITCs, for a total of $250 million ITCs awarded in this round. The Announcement also notified applicants that the 2010-2011 allocation round under the advanced coal program is open, and no allocation round will be conducted under the gasification program. A copy of the announcement is available online at www.energytaxcredits.com.

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Construction on the Idaho Wind project, the state’s largest, began in Bliss, Idaho in August. Initiated by Exergy Development Group, the 183-megawatt, 122-turbine project comprises 11 wind farms spread across 10,000 acres of farmland in southern Idaho. Project investors include GE Energy Financial Services, Reunion Power and Atlantic Power Corp. All power generated will be sold to Idaho Power Company under 20-year agreements. The development is expected to create 175 direct jobs, and a National Renewable Energy Laboratory model projects that a wind project of this size would typically support the equivalent of 2,200 full-time jobs in the United States for one year. After completion, scheduled for the end of the year, the portfolio is expected to qualify for the federal Treasury Grant program designed to stimulate renewable energy projects.

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Enbridge Inc. entered into an agreement with U.S. Geothermal Inc. to invest as much as $23.8 million in the 35 megawatt Neal Hot Springs geothermal project in eastern Oregon. That equity will cover the remaining equity share of the construction costs, with a U.S. Department of Energy (DOE) conditional loan commitment funding the balance. Enbridge will acquire a 20 percent ownership interest in the power plant, and will receive 24 percent of the Section 1603 cash grant in lieu of investment tax credits. A total of $36.8 million in equity, together with as much as $102.2 million in debt from the DOE loan guarantee program, is now available for the $124.3 million project’s completion. Neal Hot Springs is the first geothermal project to be offered a DOE conditional commitment for a loan guarantee. U.S. Geothermal anticipates the power plant to begin commercial operations in the fourth quarter of 2012.

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Butte College in Oroville, Calif. approved the third phase of its solar project, which will bring the college’s total solar capacity to 4.55 megawatts upon completion in May 2011. The 2.7 megawatt project’s 14,000 Mitsubishi Electric solar modules will produce 3,482 megawatt-hours of energy annually. Chico Electric and DPR Construction will install the solar panels on the ground and rooftops to create covered parking areas and walkways. Total project funding is $17 million, with Clean Renewable Energy Bonds (CREBs) covering $12.65 million and the college funding the remainder. Pacific Gas & Electric, the California Solar Initiative and American Recovery and Reinvestment Act allocations will provide the college with nearly $1 million in rebates. Bank of America arranged and funded the CREBs as part of its $20 billion initiative to address climate change.

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The American Wind Energy Association named John M. Anderson Jr. its director of siting policy. Anderson has more than 18 years of experience in the environmental planning, permitting, regulatory and analytical fields. Most recently, he served as eastern regional manager of environmental affairs for BP Wind Energy, where he was responsible for the development of new wind energy projects in the eastern half of the United States, as well as managing post-construction environmental issues at BP Wind’s operating facilities across the country.

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