by Jbs032310e3 — March 24, 2010—The Department of the Treasury and the Department of Energy recently announced new guidance on the tax treatment for grantees receiving Recovery Act funding under the $3.4 billion Smart Grid Investment Grant program. Under the guidance, the Internal Revenue Service is providing a safe harbor under section 118(a) of the Internal Revenue Code for corporations receiving funding under the program.
With the determination that Smart Grid Investment Grants to corporations are non-taxable, corporate utilities will be able to launch their investments with a clear indication of the tax status for their projects. This decision will allow the Department of Energy to move forward quickly to finalize grant agreements over the coming weeks, says the government.
The $3.4 billion Smart Grid Investment grant program is the largest single energy grid modernization investment in U.S. history, notes the DOE. Through this Recovery Act-funded program, 100 private companies, utilities, manufacturers, cities and other partners are receiving funding to implement a broad range of technologies that will spur the nation’s transition to a smarter, stronger, more efficient and reliable electric system.
Awardees have stated that the projects will create tens of thousands of jobs, and consumers in 49 states will benefit from these investments in a stronger, more reliable grid. Implementing the smart grid will promote energy-saving choices for consumers, increase efficiency, and foster the growth of renewable energy sources like wind and solar, says the DOE.