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Cal. Ridge Wind Energy LLC v. United States

United States Court of Appeals for the Federal Circuit

May 21, 2020, Decided

2019-1463, 2019-1465

Opinion

TARANTO, Circuit Judge.

California Ridge Wind Energy LLC and Bishop Hill Energy LLC each own a windfarm that was put into service in 2012. Thereafter, each company applied for a cash grant from the federal government, based on specified energy-project costs, under section 1603 of the American Recovery and Reinvestment Tax Act of 2009, Pub. L. No. 111-5, 123 Stat. 306, 364. The United States Department of the Treasury awarded California Ridge and Bishop Hill less than the amounts they had requested, rejecting as unjustified the full amounts of certain development fees included in the submitted cost bases. Each windfarm owner sued the United States in the Court of Federal Claims for the difference between the amounts they had been [*2]  paid and the amounts allegedly mandated by section 1603. The government counterclaimed, alleging that it had actually overpaid the two firms.

The Court of Federal Claims ruled in favor of the government. California Ridge Wind Energy, LLC v. United States, 143 Fed. Cl. 757, 763 (2019); Bishop Hill Energy, LLC v. United States, 143 Fed. Cl. 540, 545 (2019).1 The sole issue on appeal is whether the two firms proved that their proposed development fees, in the amounts asserted, were properly included in their cost bases. The trial court held that they did not. California Ridge, 143 Fed. Cl. at 762-63. California Ridge and Bishop Hill appeal on that issue, making no separate argument about the amount of development fees ultimately included in the cost basis if the trial court properly rejected their proposed amounts. We affirm.

] Section 1603 requires the Secretary of the Treasury to "provide a grant to each person who places in service specified energy property to reimburse such person for a portion of the expense of such property . . . ." Pub. L. No. 111-5, § 1603(a). The amount of the grant is the "applicable percentage of the basis of such property," id., § 1603(b)(1), which is the cost of the property, 26 U.S.C. § 1012(a). For "qualified small wind energy property," the applicable percentage is thirty percent. Pub. L. No. 111-5, § 1603(b)(2)(A), (d)(4).

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2020 U.S. App. LEXIS 16201 *

CALIFORNIA RIDGE WIND ENERGY LLC, INVENERGY WIND LLC, BISHOP HILL ENERGY LLC, Plaintiffs-Appellants v. UNITED STATES, Defendant-Appellee

Prior History:  [*1] Appeals from the United States Court of Federal Claims in Nos. 1:14-cv-00250-RHH, 1:14-cv-00251-RHH, Senior Judge Robert H. Hodges, Jr.

Bishop Hill Energy, LLC v. United States, 143 Fed. Cl. 540, 2019 U.S. Claims LEXIS 687 (Apr. 24, 2019)Cal. Ridge Wind Energy, LLC v. United States, 143 Fed. Cl. 757, 2019 U.S. Claims LEXIS 688 (Apr. 24, 2019)

Disposition: AFFIRMED.

CORE TERMS

development fee, development agreement, windfarm, costs, amounts, trial court, argues, development service, development work, cost basis, transactions, round-trip, eligible, markups, development costs, reliably, funds, Wind, sham, indicia of reliability, amount stated, clear error, documents, entities, generic, premium, Energy, wired

Tax Law, Sales & Exchanges, Basis Rules, Cost Basis of Property, Federal Tax Administration & Procedures, Tax Credits & Liabilities, Credits, Overassessments & Refunds, Evidence, Burdens of Proof, Allocation, Civil Procedure, Appeals, Standards of Review, Abuse of Discretion, Tax Credits & Liabilities, Clearly Erroneous Review, De Novo Review, Reviewability of Lower Court Decisions, Preservation for Review