WASHINGTON (CN) - Wind power companies sued the United States for $40 million, claiming Uncle Sam refuses to honor its own tax credit and cash grant system for renewable energy operations.
Four Alta Wind III Owner-Lessors, subsidiaries of nonparty Terra-Gen Power, claim the federal government ignored independent appraisals and used its own reduced appraisals to skimp on grants.
"In particular ... [the Department of Treasury] violated Section 1603 [of the American Recovery and Reinvestment Act of 2009] by rejecting plaintiffs' cash grant applications that were based on the established appraisal methods for ITCs [investment tax credits]," the complaint states. "Treasury substituted its own greatly reduced valuation, arrived at through the disregard or misapplication of established rules for determining value for the purpose of ITCs."
The wind farms claim that "Treasury refused to revise its conclusion, even in the face of clear evidence that its own valuation methods did not comply with the rules for ITCs that Congress instructed Treasury to follow in administering cash grants."
Each investor claims it was shorted by $10.2 million: each one getting a grant of $23,093,966 instead of the $33,340,117 they had requested.
"Treasury has made clear that its cash grant awards to plaintiffs are final," they say.
They accuse the government of using logic that "flies in the face of common sense." They claim the government ignored fundamental rules for establishing cost basis, contradicted two valid independent appraisers, misinterpreted market expectations and disregarded tax law on leases and sell-back operations.
They each want another $10.2 million.
They are represented by Steven Rosenbaum, with Covington Burling.
They sued in the Court of Federal Claims.
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