Quality and performance standards
Quality and performance standards -
(1) In general. Energy property must meet quality and performance standards, if any, that have been prescribed by the Secretary (after consultation with the Secretary of Energy) and are in effect at the time of acquisition.
(2) Time of acquisition. Under this paragraph (m) the time of acquisition is -
(i) The date the taxpayer enters into a binding contract to acquire the property or
(ii) For property constructed, reconstructed, or erected by the taxpayer, (A) the earlier of the date it begins construction, reconstruction, or erection of the property, or (B) the date the taxpayer and another person enter into a binding contract requiring each to construct, reconstruct, or erect property and place the property in service for an agreed upon use. See example under paragraph (m)(4) of this section.
(3) Binding contract. Under this paragraph (m), a binding contract to construct, reconstruct, or erect property, or to acquire property, is a contract that is binding at all times on the taxpayer under applicable State or local law. A binding contract to construct, reconstruct, or erect property or to acquire property, does not include a contract for preparation of architect's sketches, blueprints, or performance of any other activity not involving the beginning of physical work.
(4) Example. The following example illustrates this paragraph (m).
(n) Public utility property -
(1) Inclusions. Public utility property is included in both of the following categories of energy property:
(i) Shale oil equipment and
(ii) Equipment for producing natural gas from geopressured brine.
(2) Exclusions. Public utility property is excluded from each of the following categories of energy property:
(i) Alternative energy property,
(ii) Specially defined energy property,
(iii) Solar or wind energy property, and
(iv) Recycling equipment.
(3) Public utility property. The term “public utility property” has the meaning given in section 46(f)(5).