Curtailments may not prevent a power plant from being considered in service for tax purposes.
Solar, fuel cell and small cogeneration or CHP projects face deadlines to be put in service to qualify for investment tax credits.
The IRS said in private letter rulings that the agency made public in late June that two utility-scale solar photovoltaic projects will be in service notwithstanding that the local utility to whose grids the projects need to connect to get their electricity to market will not have completed part of the network upgrades required to accommodate the electricity on a segment of the grid due to litigation with local residents. The utility determined that the projects are able to deliver their full capacity despite not having made the upgrades to the segment. However, the projects may have to be curtailed while the segment is under construction.
The IRS said the projects will be considered in service even “if more frequent than anticipated curtailment . . . occurs due to the unanticipated delays” in completing the upgrades.
The rulings are Private Letter Rulings 201326008 and 201326009.