Last week, the Obama administration announced $2.3 billion in manufacturing tax credits, specifically designed to stimulate investment (and job growth) in the manufacturing sector associated with clean energy projects. (For more on the manufacturing tax credit, see our previous post.) With persistent unemployment plaguing the manufacturing sector, it makes sense that this initiative is receiving a lot of attention from the administration – and in the press.
Receiving less publicity – but reducing regulatory uncertainties for banks investing in certain renewable energy projects – is a recent FERC ruling regarding the production tax credit. As noted in the Order (pdf), renewable energy project developers rely on passive equity investors that can monetize a project’s production tax credits. By removing any concern that tax equity investors could be viewed as “affiliates” of a public utility that would have to be disclosed in a change in status filing under Section 203 of the Federal Power Act or would require a FERC waiver prior to investing, FERC’s order helps ensure that prospective tax equity investors will not be discouraged from investing in new wind power projects due to concerns over increased regulatory burdens.
For more information on FERC’s oversight of renewable
projects, contact Randy Rich
in Pierce Atwood’s
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