CLEAN RENEWABLE ENERGY BONDS (CREBs) James F. Duffy, Esquire Nixon Peabody LLP 100 Summer Street...
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Transcript of CLEAN RENEWABLE ENERGY BONDS (CREBs) James F. Duffy, Esquire Nixon Peabody LLP 100 Summer Street...
CLEAN RENEWABLE ENERGY BONDS (CREBs)
James F. Duffy, EsquireJames F. Duffy, EsquireNixon Peabody LLPNixon Peabody LLP100 Summer Street100 Summer StreetBoston, MA 02110-2131Boston, MA 02110-2131Tel.: (617) 345-1129Tel.: (617) 345-1129Fax: (866) 947-1697 Fax: (866) 947-1697 [email protected]@nixonpeabody.com
FINANCING WIND POWER: THE FUTURE OF ENERGY
Debt PanelDebt Panel
The Institute for Professional and Executive Development, Inc.
July 25-27, 2007July 25-27, 2007Santa Fe, New MexicoSanta Fe, New Mexico
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CREBs
• Clean Renewable Energy Bonds (CREBs)
• Under Section 54 of the Internal Revenue Code, which was added in 2005
• Designed to provide an incentive for governmental bodies (including Indian tribes) and cooperative electric companies to produce renewable energy
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CREBs
• CREBs are “tax credit bonds”
• The borrower gets a 0% loan, as the Federal Government pays interest on the bonds in the form of a tax credit to the bond holder
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CREBs
• A total of $1.2 billion of CREBs has been authorized, to be allocated in 2 rounds
• The first round allocations have occurred, and second round applications were due July 13, 2007 (See IRS Notice 2007-26)
• All CREBs must be issued by December 31, 2008
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CREBs
• CREBs are allocated to applicants beginning with the project with the smallest dollar amount of volume cap requested and then the next-smallest dollar volume cap, until the total volume cap is exhausted
• At most $750 million of the $1.2 billion in CREBs can be allocated to governmental bodies
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CREBs
• There are bills in Congress to extend the CREB program beyond the initial two rounds
– H.R. 1821 is championed by public power
– H.R. 1965 is championed by co-ops
– H.R. 2776 would allocate $2,000,000,000 of “New Clean Renewable Energy Bonds” 60% to public power providers and 40% to cooperative electric companies
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