The Treasury Department recently issued a series of FAQs in an effort to clarify when projects will be treated as having “begun construction” for purposes of the section 1603 grant. As you may be aware, a project that otherwise qualifies for the grant but is not placed in service before the end of 2010 may still be eligible for the grant if construction on the project is begun in 2009 or 2010 and the project is eventually placed in service before the applicable “credit termination date.” The new FAQs address a number of the unanswered questions. However, the framework adopted by the Treasury Guidance and the new FAQs is complex, and there appears to be a considerable amount of confusion among developers about how the “beginning construction” requirement can be met. Therefore, we thought it important to issue this alert.
Continue Reading Understanding “Beginning Construction” Under Section 1603
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Proposed Legislation to Limit ITC Grants for Renewable Projects
Proposed legislation in the Senate would greatly limit the effectiveness of the grant in lieu of tax credits for renewable energy projects under section 1603 of the American Recovery and Reinvestment Act.
The section 1603 grant currently applies to renewable energy projects, such as wind, solar, geothermal and biomass, that are placed in service before…
U.S. Department of Energy Announces Final Rule Amending Regulations for Loan Guarantee Program
On December 7, 2009, Energy Secretary Steven Chu announced the issuance of a final rule amending the October, 2007 Final Regulations implementing the Loan Guarantee Program under Section 1703 of Title XVII of the Energy Policy Act of 2005 (the "Section 1703 Program"). The amendments implemented through the final rule were first identified in a Notice of Proposed Rulemaking and Opportunity for Comment issued by the Department of Energy ("DOE") on August 7, 2009. The comment period for the proposed amendments ended on September 22, 2009; the comments received by the DOE from the industry and other interested parties were largely supportive of the proposed amendments.
In a nutshell, the amendments to the regulations outlined in the final rule are designed to:
- provide flexibility in the determination of an appropriate collateral package to secure the guaranteed loan obligations;
- eliminate the requirement that the Secretary receive a first priority lien on all project assets as a condition for obtaining the loan guarantee;
- facilitate collateral sharing and related intercreditor arrangements with other project lenders; and
- provide a more workable interpretation of certain statutory provisions regarding DOE’s treatment of collateral that is more consistent with the intent and purposes of Title XVII.
Funds Available to Repower Biorefineries
USDA recently announced that it will deploy up to $20 million to encourage the use of renewable biomass as a replacement fuel source for fossil fuels as well as to provide process heat or power in the operation of eligible biorefineries. Eligible biorefineries are biorefineries that meet all of the following criteria:
- Convert renewable biomass into biofuels and
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