WIND USES FED MONEY WELL

Lessons Learned From The Treasury's Wind Project Cash-Grant Audits
David Burton, 15 November 2011 (North American Windpower)

"The U.S. Department of the Treasury's Office of Inspector General (OIG) recently released its audit reports of selected recipients of cash grants awarded under Section 1603 of the American Recovery and Reinvestment Act of 2009…[including] reports for three wind farms with cumulative costs of $946.3 million eligible for the 30% Treasury grant and a total nameplate capacity of 546.5 MW…[T]he amounts challenged by the OIG thus far were relatively small.

"For the three wind farms, the OIG recommended seeking reimbursement from the project owners of less than $40,000. The Treasury is seeking tax accounting guidance, presumably from the Internal Revenue Service, with respect to approximately $2 million more of potential reimbursement. The low level of these amounts reflects well on the renewable energy industry…[and] offer some valuable insight into what project expenses are eligible under the cash-grant program."

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"…[T]he reports were generally supportive of grant eligibility for spare parts - provided that, at the time the grant application is filed, title and risk of loss to the spare parts have passed to the applicant. However, no clear standard for spare parts was articulated…[I]t would appear that, in order to qualify for the grant, spare parts need to be reasonably necessary to operate the project…

"…[T]ools - such as those needed to service the wind turbine - appear to be grant-eligible under certain circumstances…[I]n order to qualify, tools must be necessary to operate the project…Applicants should expect continued scrutiny of grant applications…"