THE FEDERAL CIRCUIT VACATES THE ALTA WIND DECISION

摘要

The Federal Court of Appeals has overturned the Alta Wind decision, thereby (for the time being) vacating the investor's award of approximately $200 million received in the Court of Federal Claims. Although this is not a helpful decision for the industry, it is not necessarily a bad result either. Here are some preliminary thoughts about last week's decision. As a refresher, here is a brief summary of the relevant facts. The Alta Wind case involved "1603 grants", i.e. the program established to provide government grants for renewable projects in lieu of tax credit finance at a time when investor interest in tax credits had greatly diminished. The computation of the grant was very similar to the computation of tax credits, i.e. 30% of the cost of the renewable facility. In this case, the facilities were built, power purchase agreements were arranged and the facilities were sold to the investor for a higher price, almost $700 million higher, than the facilities cost to build. When claiming the 1603 grant, the investor sought 30% of the total price, including the mark-up. The Treasury declined to pay a grant on this additional amount, concluding that the addition was really attributable to the business's goodwill (and other similar arguments), rather than the actual tangible property that constituted the facility.