Investors in the giant Alta Wind facility in California’s San Joaquin Valley have started an action in the US federal court to recover subsidies they say are owed. But they but could end up millions of dollars worse off – through having to return subsidies they have already received.
Some of the wind farm’s early investors assert that more than $200 million in additional subsidies is owed to them by the federal government. But Obama administration officials, in their turn, are arguing that the government paid $59 million too much. Last week, a judge sharpened the administration’s side of the sword, agreeing that the U.S. can try to retrieve some of the taxpayer dollars paid.
On 10 February in the US Court of Federal Claims judge Thomas Wheeler decided that the Treasury Department could counter the claims from investors in the Alta Wind project, the largest wind farm in the United States.
The wind farm investors, Wheeler wrote, "have no guarantee of keeping the amounts that Treasury paid them." He noted that "a refund always was a possibility given a proper understanding of the issues." An upcoming trial, on 9 May, will determine who owes money to whom. It is likely to be scrutinised closely by the USA’s big renewable-energy investors, which include giant corporations such as Google, for spillover effects.
Wheeler’s ruling has surprised the Alta Wind Facility investors. When they started their suit in 2013 to get a bigger share of federal money, the possibility that they could be the ones owing $59 million did not appear to be on the table.
Under a Democratic-drafted $787 billion stimulus bill (the 2009 American Recovery and Reinvestment Act) renewable energy developers could receive federal grants equal to 30% of the project’s ‘reasonable and allowable’ costs. The problems now arising are over how these costs are calculated. From 2009 to 2013, according to a Treasury Department report, at least 9016 such grants worth at least $18.5 billion were provided. Some, in turn, prompted lawsuits over how the government calculated grant amounts. At least two dozen such suits have been filed in claims court, according to a tally by Hunton & Williams.