The Internal Revenue Code of 1986 provides for a renewable energy tax credit to owners or operators of electric generation facilities that produce electricity from qualified energy resources at qualified facilities placed into service by specified dates. The Energy Policy Act of 2005 amends this to apply the credit to incremental production gains from efficiency improvements or capacity additions to existing hydroelectric facilities placed into service after 8 August 2005 and before 1 January 2008.

PacifiCorp requested the certification in light of the addition of capacity at the J.C. Boyle development – part of the Klamath project – that went on-line on 8 November 2005.

The Energy Policy Act requires FERC to certify the ‘historic average annual hydropower production’ and the ‘percentage of average annual hydropower production at the facility attributable to the efficiency improvement or additions of capacity’ so that the entity may then claim the tax credit.

In order for FERC to certify a project, licencees must submit the historic average annual hydro power production baseline they believe to be appropriate for the facility in question, along with supporting calculations and water flow data, and information regarding the efficiency upgrade or capacity addition. FERC will then review the information and act on the certification.

In December 2005, FERC staff issued a guidance document on what information is necessary to obtain certification, which is available on FERC’s website by clicking on the weblink below.

External weblinks

Federal Energy Regulatory Commission