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E.ON sells tax credits for future development
Credit: BY KEN de la BASTIDE | KOKOMO TRIBUNE | March 31, 2013 | ~~
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Translate: FROM English | TO English
E.ON Climate & Renewables has sold a stake in the Wildcat Wind Farm for $174.9 million to a group of investors that include two of the nation’s largest financial institutions.
J.P. Morgan Chase and Wells Fargo purchased the federal subsidy tax credits of 2.2-cents per kilowatt generated by phase one of the Wildcat Wind Farm in Tipton and Madison counties.
The tax-equity financing give investors a share of the project’s tax incentives.
E. ON spokesman Matt Tullis said E. ON this is the fourth time the company has sold the tax credits on wind farms in operation over the past 13 months.
The other wind farm tax credits sold at the Magic Valley Wind Farm in Texas and the Pioneer and Settler’s Trail wind farms in Illinois.
Tullis said the E.ON can’t use the tax credits so the deal with J. P. Morgan and Wells Fargo allows them to tax advantage of the credits.
“It raises capital for future projects,” he said. “It’s another way to raise capital.”
Tullis said potentially some of the funding could be used on Phases 2 and 3 of the Wildcat Wind Farm project in Grant, Tipton and Howard counties.
“It’s hard to earmark where the funding will be used,” he said.
Phase 1 of the Wildcat Wind Farm in Tipton and Madison counties began operating in January. The company located 125 turbines in Phase 1 which will generate 200 megawatts of electricity. The company invested between $300 million and $400 million on the project.
The company uses 1.6-megawatt General Electric turbines and sells a portion of the output to Indiana & Michigan under a 20- year agreement.
Phase 2, will be located in Grant and Howard counties and expected to generate 100 megawatts of electricity. Phases 3 and 4 will be located between Greentown and Converse and in the Windfall area, generating up to 800 megawatts of electricity, which will be tapped into the grid at a power substation south of Greentown.
A megawatt provides electrical energy to 1,000 homes.
“We will start construction in Howard and Grant counties this year and will be completed in 2014,” Andy Melka, project developer for E. ON, said last week.
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