Former coal lobbyist Glenn Schleede plays Don Quixote, crusading against the DOE's 20-year initiative to boost investment in windmills.
A renewable incentive expires with the Treasury grant program.
specified energy property at the site. Physical work of a significant nature also includes physical work that has taken place under a binding written contract for the manufacture, construction, or production of specified energy property for use by the applicant’s facility provided the contract is entered into prior to the work taking place. Some examples:
• Preliminary work such as planning or designing, exploring, researching, clearing land, building fences, obtaining permits or securing financing isn’t physical work of a significant nature. Excavation to change the contour of land isn’t physical work of a significant nature, but excavation for footings and foundations is.
• Generally, the cost of removal from the site of existing structures or property is associated with the property being removed or is capitalized to non-depreciable land. This is considered preliminary work and doesn’t constitute physical work of a significant nature on specified energy property.
• Roads on the site that are integral to the qualified facility are specified energy property; these include onsite roads that are used for moving materials to be processed ( e.g., biomass) and roads for equipment to operate and maintain the facility. Starting construction on these roads constitutes the beginning of construction. But roads for access to the site, or roads used solely for employee or visitor vehicles aren’t specified energy property; starting construction on these roads isn’t starting physical work of a significant nature on specified energy property.
• Test drilling for a geothermal deposit is a preliminary activity and isn’t physical work of a significant nature.
• Because a building isn’t specified energy property, construction of a building isn’t physical work of a significant nature. However, the following structures aren’t treated as buildings for this purpose: 1) a structure that’s essentially an item of machinery or equipment; or 2) a structure that houses property used as an integral part of a qualified activity if the use of the structure is so closely related to the use of the housed property that the structure clearly can be expected to be replaced when the property it initially houses is replaced.
A qualified facility is defined as a specified energy property that includes property integral to the production of electricity, but doesn’t include property used for electrical transmission. Thus, physical work on a transmission tower located at the site isn’t physical work of a significant nature because the transmission tower isn’t part of the qualified facility. However, physical work on a transformer that steps up the voltage of electricity produced at the facility to the voltage needed for transmission is physical work of a significant nature because power conditioning equipment is part of the qualified facility.
In general, any physical work on the specified energy property will be treated as the beginning of construction even if such work relates to only a small part of the facility, but Treasury will closely scrutinize any construction activity that doesn’t involve a continuous program of construction or a contractual obligation to undertake and complete within a reasonable time a continuous program of construction. Disruptions in the work schedule that