The IRS released a private letter ruling (201311003) on March 15 regarding the placed in service date for a wind farm for purposes of claiming the production tax credit and depreciation. In the ruling, a limited liability company (1) completed physical construction on all wind turn generators (WTG), (2) all of the WTGs will have been individually commissioned and accepted, (3) a final commissioning certificate for the project as a whole was issued, and (4) all the permits and licenses needed to operate will have been issued. Importantly, the interconnection between the project and the electrical line will not be completed by the end of the year the WTGs will have completed the physical construction, with a temporary arrangement allowing partial generation put in place until the transmission line is completed. According to the Ruling, the focus in determining a placed in service date is on ascertaining from the relevant facts and circumstances the date the unit begins supplying product in such a manner that it is routinely available and is consistent with the unit's design. The Ruling concludes that the project will be considered placed in service even though the transmission line is not yet connected to the project and the temporary output is below full capacity. This is significant for companies trying to qualify for the renewable energy projects that require a placed in service date to qualify for the credit or qualify for bonus deprecation in certain years where the project had not been completed.
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