basis risk

Below are soundbites from panelists at the Infocast Wind Power & Finance Investment Summit on February 28, 2017 in Rancho Bernardo, California.  The soundbites are organized by topic, rather than in chronological order, and were prepared without the benefit of a transcript or a recording.  The soundbites were edited for clarity.

Prospects for Tax Reform

 “Generally in Congress things take longer than they want them too.” – In House Lobbyist

“Tax reform won’t take shape until next year, and that is probably early.” – Regulatory Affairs Executive

“Amidst the unknowns, if you are not taking into account the uncertainty of the corporate tax rate, you are probably not getting it right.” – Regulatory Affairs Executive

“If tax reform is good for corporate America, then in the grand scheme it is good for us, given the [number of] corporate buyers” of wind power.  – CEO of Texas Wind Developer

 

Allocation of Tax Reform Risk in Transactions

“There is a risk that early deals that have to get done set a standard for the allocation of tax reform risk [between the tax equity investor and the developer] that is not sustainable.” – Renewable Energy Executive

“If corporate tax reform remains uncertain, it poses a risk of such a big swing in the economics [of a wind project] that no one is prepared to absorb that risk.”  – Executive from East Coast Utility

“Our [utility] commission has been okay with a clause in a power purchase agreement requiring renegotiation of the pricing for tax changes.  If there is an adverse tax change, we will be buying power at the higher rates in any event at that time.”  – Executive from Midwest Utility

 
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