Section 1603 of the American Recovery and Reinvestment Act of 2009 provided a cash grant from the US Treasury to investors in certain renewable energy facilities. The amount of each grant was to be determined on the basis of tangible eligible property in a given facility.
Windfarm owners file suit over grant amounts
In Alta Wind I-VI v. United States, plaintiffs—owners of six wind farms in southern California—allege that the US Treasury underpaid them pursuant to Section 1603.
The Section 1603 grant was in most cases calculated as 30% of the tangible eligible property in the renewable energy facility. Alta Wind sought $703 million in grants; the government awarded $495 million, and Alta filed suit, seeking an additional $206 million. Litigation continued, from the government’s initial loss in the Court of Federal Claims to an appeal to the Federal Circuit Court, and a remand back to the Court of Federal Claims—a process spanning more than a decade. The dispute remained centered around how to calculate plaintiffs’ basis in tangible eligible property for purposes of the cash grant.
Expert analyzes grant calculations
In 2021, the US Department of Justice retained Glenn R. George regarding calculation of the Section 1603 grants, specifically whether plaintiffs properly valued transmission rights and power purchase agreements (PPAs) in calculating the requested grant amounts. Dr. George’s analysis addressed whether the PPAs could have acquired above-market value (an intangible) as a result of the decline in market wind power prices in California between the time the PPAs were signed and the wind farms were sold. He submitted two expert reports, was deposed twice, and testified over three days at trial in the Court of Federal Claims.
Decision could set precedent
A decision is expected in 2026. Industry experts have expressed the view that this case could set the precedent for a number of similar cases which are still pending in the Court of Federal Claims.
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