The Connecticut Legislative Review Committee approved proposed regulations last week that will allow for the siting of wind turbines in the state. The new regulations will end what has effectively been a three-year moratorium on new wind power projects in Connecticut. In 2011, in response to controversy surrounding two proposed wind projects in the state, the Connecticut General Assembly passed Public Act No. 11-245, An Act Requiring the Adoption of Regulations for the Siting of Wind Projects. The act directed the Connecticut Siting Council, the state entity with jurisdiction over the siting of power and telecommunications facilities, to adopt regulations for the siting of wind turbines on or before July 1, 2012. The act further stated that no wind turbine could be sited before the new regulations were adopted. The Siting Council has been working since that time to promulgate regulations and has had multiple versions rejected by the Legislative Review Committee before this latest version was approved.
The wind regulations were promulgated nearly four months after the deadline for developers of wind projects to take certain actions that would safe harbor the project to qualify for the Federal Renewable Electricity Production Tax Credit (PTC) — the extension of which is an issue open for debate in Congress. For a project to have been safe harbored for the PTC, the project must have satisfied the "beginning of construction" test by either (as more fully explained in and subject to IRS Notices 2013-29 and 2013-60) having commenced construction through physical work of a significant nature or have incurred sufficient qualifying expenses prior to Jan. 1, 2014, when the PTC expired. As a practical matter, those Connecticut projects that are currently likely to qualify for the PTC are those that were under development when the General Assembly originally imposed the de facto moratorium in 2011. Without a renewal of the PTC, the new state regulations may be of little use to certain projects.
Footnote
1 Is Conn. Really Getting A Second Wind? Law360, April 29, 2014, http://www.law360.com/tax/articles/532567?nl_pk=d2b06b3b-03a0-4bc9-bf2b-0a84ecda2b85&utm_source=newsletter&utm_medium=email&utm_campaign=tax.
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