DOE, Treasury: Smart Grid Grants To Be Tax Exempt
March 10 2010 - 4:51PM
Dow Jones News
The U.S. Treasury and the Department of Energy Wednesday said
federal investment grants for smart grid projects--artificially
intelligent power grid systems--will be tax exempt.
Firms such as Duke Energy Corp. (DUK), FPL Group Inc. (FPL),
Exelon Corp. (EXC) and Constellation Energy Group Inc. (CEG) have
been awaiting the tax guidance from the government before moving
ahead with their proposed projects.
The industry had warned that taxing the $3.4 billion made
available through the smart grid investment grant program could
result in the cancellation or downsizing of electric-grid projects.
An official for the industry group, the Edison Electric Institute,
said many companies weren't signing final agreements on the
projects until the tax dispute had been resolved.
"This is an important step toward reaching the Administration's
goal of a more reliable and efficient electrical grid," said Matt
Rogers, Senior Advisor to the Secretary of Energy.
The grants are funded through the stimulus package approved last
year. The DOE said the program was the single largest energy grid
modernization investment in the U.S.
A smart grid is essential for increasing the efficiency of the
nation's power grid and to expanding renewable energy
production.
"By clarifying the tax treatment of Smart Grid Investment
Grants, we are ensuring that their full impact is felt in the
communities where these investments are being made," Treasury
Assistant Secretary for Management Dan Tangherlini said in a
statement.
Many of the projects to increase reliability and energy
efficiency were already being developed before the grant program
started. And even with the tax rate as high as 40% on the handout,
many companies still stand to receive tens of millions of dollars
they wouldn't have otherwise. The projects are important to the
earnings of utilities, which rely on increased infrastructure
investment for growth.
-By Ian Talley, Dow Jones Newswires, 202-862-9285;
ian.talley@dowjones.com
(Mark Peters in New York contributed to this report)
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