Western Wind Energy Corp., through its wholly owned subsidiary Windstar Energy, LLC, has been awarded a cash grant of more than $78 million under U.S. Internal Revenue Code Section 1603 in connection with the company's recently completed 120MW Windstar Project in Tehachapi, according to a press release issued by the Vancouver, B.C. company.
"The U.S. Treasury Department has notified Western Wind that the payment [of $78,334,713] will be made within seven days of July 9," the press release stated. The amount of the award is $13,221,994 below the amount originally requested by Western Wind, apparently due to changes in the administration of the program by the Treasury Department which has reduced the suggested guidance on the amount of any developer fee which can be included in the 30 percent cash grant amount, the press release stated.
The Section 1603 program was created under the American Recovery and Reinvestment Act and offered developers of renewable energy projects the option to select a one-time cash payment in lieu of taking the Investment Tax Credit or the Production Tax Credit for which they would otherwise have been eligible, according to an Energy Dept. website.
Completion of the $313 million project was celebrated with a ribbon-cutting on June 19. At the time Western Wind CEO Jeff Ciachurski said the project pumped $12 million into state sales taxes during the construction phase and will bring Kern County more than $2 million per year in property taxes.”
He added that the project has 12 full-time operators and maintenance employees who live locally. He said the project employed about 150 people for a year during its construction phase.
According to the press release, Western Wind's management believes that, notwithstanding the revised Treasury position on developer fees, the developer fee included in the cash grant application for the Windstar project was proper and is supported by appropriate analyses by its external counsel and tax advisors.
The company intends to engage in discussions with the Treasury Department regarding the appropriate amount of the developer fee for the project and to request that the balance of original amount of cash grant requested be reinstated and paid.
In addition to its headquarters in Vancouver, Western Wind has branch offices in Tehachapi and in Scottsdale, Ariz. Western Wind trades on the Toronto Venture Exchange under the symbol "WND", and in the United States on the OTCQX under the symbol "WNDEF."
The company owns and operates three wind energy generation facilities in California, and one fully integrated combined wind and solar energy generation facility in Arizona. The three operating wind generation facilities in California are comprised of the 120MW Windstar, 4.5MW Windridge facilities in Tehachapi, and the 30MW Mesa wind generation facility near Palm Springs. The facility in Arizona is the company's 10.5MW Kingman integrated solar and wind facility. The company is further developing wind and solar energy projects in California, Arizona, and Puerto Rico.