GE's $1bn turbine snag on PTC
General Electric is sitting on wind turbine orders valued at more than $1bn as certain developers wait for further US Treasury clarification on eligibility criteria for the industry’s main federal tax incentive.
Chief Financial Officer Jeff Bornstein says the 400 to 500 turbines are for projects that involve bank financing and tax equity investors.
“Very tough to move those projects along until they are absolutely certain that they are going to qualify for the production tax credit (PTC). We expect that clarification to come from the Treasury in the next week or two. We’ve seen that clarification and we think it is helpful,” he told analysts on a second quarter earnings conference call.
At issue is the “start of construction” rules for a project to qualify for the PTC, which expired at the end of 2013. Treasury’s Internal Revenue Service (IRS) twice last year issued guidance in an effort to bring clarity to that issue.
Bornstein did not name the projects, where they are located in the US or further detail PTC concerns of those particular developers.
He also did not say what model turbines are involved.
A Treasury spokesperson did not immediately comment on when IRS may issue additional PTC clarification.
GE’s wind turbine revenue in Q2 was up 30% versus a year earlier as it delivered 159 more units. The company did not divulge total turbine deliveries or new orders booked.
Overall, the company reported $3.5bn net profit, up from $3.1bn during the same period in 2013.
US industrial giant GE reported increased profits for the second quarter of 2014 as forged ahead to complete its mega-acquisition of the energy assets of France’s Alstom.
GE net profit was $3.5bn in Q2, up from $3.1bn during the same period in 2013. Revenues increased 3% to $36.2bn.