AHC attorney David R. Cook will present a webinar regarding the legal and tax aspects of power purchase agreements (PPAs). Along with two other power industry professionals, he will address accounting and tax issues involved with PPAs. In addition, David will discuss important provisions in PPAs for allocating the risks and benefits arising from PPAs.
From the webinar host:
Power purchase agreements (PPAs) are a central component to electricity markets and economics. Because of their importance, they exist in a complex regulatory environment. Accordingly, the accounting, tax, and legal treatment of power purchase agreements must be addressed before their execution. The three attributes of PPA handling, including accounting, tax, and legal aspects will be covered in this webinar.
Since the accounting rules for determining whether an arrangement contains a lease changed in 2003, forward contracts to purchase power have presented unique accounting challenges for utility companies. Definitions and accounting methods as well as the proposed changes to the definition of a lease currently being discussed by the accounting standard setting bodies and how those may affect the lease assessment will be reviewed.
On the tax side of things, the Internal Revenue Service recently ruled on the treatment of power purchase agreements in connection with the allocation of the purchase price of a renewable energy developer. We will look at the recent ruling, the important similarities and differences between power purchase agreements and leases, and their effect on tax attributes.
Finally, from a legal standpoint, there are important provisions in power purchase agreements. The allocation of risk, responsibility, and benefits are an essential component of power purchase agreements. The strength of a power purchase agreement and its provisions determines whether the parties’ assumptions and assessments will have an effect in the real world. This webinar will cover key provisions to strengthen power purchase agreements.
More information on the webinar is available here.