WASHINGTON - The Internal Revenue Service announced Friday that it has awarded the second round of clean renewable energy bond allocations to municipal and nonprofit utilities, allowing state and local governments and electric cooperatives to issue $406 million of taxable tax-credit bonds for 312 renewable energy projects.
State and local governments, which requested $782 million for 367 projects, will receive $263 million for 286 projects in 28 states under the CREB program.
The CREBs will go to 138 solar facilities, 88 wind facilities, 41 landfill gas facilities, 12 hydropower facilities, three closed-loop biomass facilities, three trash combustion facilities, and one open-loop biomass facility.
Electric cooperatives, which had asked for $170 million to finance 28 projects, will receive about $143 million for 26 projects in 13 states, for 14 wind facilities, four landfill gas facilities, six hydropower facilities, one solar facility, and one open-loop biomass facility.
Allocations for governmental entities ranged from $15,000 to $2.95 million, while cooperative borrowers received allocations ranging from $300,000 to $30 million.
"There is no limit as to what we can give to the co-ops," Timothy L. Jones, senior counsel in the IRS chief counsel's tax-exempt bond branch, said Friday. "We hit our limit with the local governments. We gave out the max we could to the local governments."
Jones said the awards were made from $477 million that could be allocated.
IRS said in a release that volume cap allocations are awarded on a "smallest to largest" project basis, beginning with the smallest dollar amount and proceeding to larger amounts until the available capacity was consumed.
CREBs, which were created under the Energy Tax Incentives Act of 2005 and the Tax Relief and Health Care Act of 2006, provide bondholders with an income tax credit in lieu of cash interest payments. Congress initially approved an $800 million cap allocation in 2005 and an additional $400 million in December 2006.
In November 2006, the IRS awarded $800 million of allocations to 610 projects, some of which was relinquished when governments or cooperatives decided the project was not for them or subsequent financing did not come through, Jones said. q