Finance structures: capitalizing on the incentives

Journal Article · · Hydro Rev.; (United States)

OSTI ID:6151985

Chapman, D A

For many years, Congress has used tax incentives in the form of accelerated depreciation, energy tax credits, and investment tax credits to promote capital investment in plants and equipment. Generally, any non-utility owner of a hydroelectric facility (for example, a corporation, project development company, limited partnership or lessor) will be entitled to accelerated depreciation, energy tax credit, and investment tax credit. Since these tax benefits can only be claimed by tax-paying companies, leveraged lease and limited partnership structures have evolved as an indirect method for a company without tax liability to obtain the benefits of the tax credits and depreciation to offset financing costs. The author suggests how leasing and limited partnership financings offer hydro project sponsors broad flexibility to structure workable third-party financing arrangements with benefits allocated in ways that allow for reasonable costs.

• Research Organization: Shearson Lehman/American Express, Inc., New York, NY
• OSTI ID: 6151985
• Journal Information: Hydro Rev.; (United States), Journal Name: Hydro Rev.; (United States) Vol. 3:3; ISSN HYREE
• Country of Publication: United States
• Language: English

Related Subjects

13 HYDRO ENERGY
130500* -- Hydro Energy-- Economic
Industrial
& Business Aspects
29 ENERGY PLANNING, POLICY, AND ECONOMY
290200 -- Energy Planning & Policy-- Economics & Sociology
296000 -- Energy Planning & Policy-- Electric Power
DEPRECIATION
ECONOMIC POLICY
FINANCIAL INCENTIVES
FINANCING
GOVERNMENT POLICIES
HYDROELECTRIC POWER PLANTS
LEASING
POWER PLANTS
TAX CREDITS