Power Purchase Agreements Excluded from Purchase Price

Power purchase agreements (PPAs) are excluded from the purchase price allocation on wind transactions, according to Private Letter Ruling 201214007 issued Friday by the Internal Revenue Service (IRS). The ruling could have significance to outright project purchases, project purchases via the sale leaseback structure, midstream purchases and other PPA arrangements. The ruling was directed to the taxpayer who requested it and may not be used or cited as precedent, according to the IRS.