The Treasury’s 1603 grant program for eligible renewable energy projects has proven to be extremely popular over the past few years. The government routinely posts on its website a list of the awardees, which now total over $3 billion. One point of frustration for applicants has been the finality of the Treasury’s decisions in cases where the applicant is partially or fully denied the awards as there is no administrative appeals process when this occurs. Moreover, the basis for denying the applications are not published, leaving applicants in the dark as to what standards the Treasury is using, making planning difficult.
On January 18, 2011, the Court of Claims Court in ARRA Energy Co. I v. United States dismissed the government’s motion to dismiss a complaint filed on behalf of an applicant that was denied an award under the 1603 program. (See No. 10-84 C (Fed. Cl. Jan. 18, 2011)). The 1603 applicants in the case placed 25 mobile solar powered generating systems for approximately $7.8 million. In 2009, the applicants placed the systems into service with the end-users generating offgrid electricity. The applicants filed separate 1603 applications for each generating system, requesting approximately $2.3 million in grants (30% of the cost basis). The applications included valuation reports of the systems prepared by the manufacturer and independent parties supporting the amounts claimed in the 1603 applications. Although the applicants met all other statutory requirements of the 1603 grant program, the Treasury denied the applications because there was insufficient documentation supporting the basis of the property claimed in the 1603 applications.
The applicants filed suit in the Court of Claims requesting relief under the theory that the 1603 program created a contractual relationship with eligible applicants and the Treasury had breached its duty by not granting the applicants the award. The government attempted to dismiss the complaint on jurisdictional grounds. The Court of Claims held that there was no contractual obligation on behalf of Treasury. Importantly, the Court of Claims also denied the dismissal on the grounds that it did have jurisdiction over the case.
Although the Court of Claims did not rule on what information the applicants needed to provide in order to have the grant awarded, the case provides applicants a place to appeal denied applications.
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