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IRS Private Letter Ruling

IRS Ruling Discusses Important Attributes of Power Purchase Agreements

In the context of renewable energy project development, power purchase agreements (“PPAs”) are the cornerstone upon which the project is built and operated.  PPAs are contracts through which the developer or ultimate owner of a project sells power generated by the project to another party.  PPAs typically represent the primary, and sometimes sole, revenue source for the project.  Accordingly, PPAs should be drafted in a manner that recognizes their critical importance to both the project developer or owner and power purchaser.Read More »IRS Ruling Discusses Important Attributes of Power Purchase Agreements

Taxable Generation Cooperative Qualified for Pre-Subchapter T Cooperative Status

While most electric cooperatives are tax exempt under Tax Code Section 501(c)(12), some of them operate as “taxable” cooperatives that are subject to a special body of federal tax law in effect before the enactment of Subchapter T in 1962. But what is a taxable cooperative, what is Subchapter T, and why would a cooperative relinquish the benefits of tax exemption? A recent IRS ruling sheds some light on these questions. The latest AHC Cooperative Taxation Brief by AHC Attorney David R. Cook Jr. discusses this IRS ruling and its implication for cooperatives.