TORONTO, March 12 /CNW/ - SkyPower Wind Energy Fund LP (the
"Partnership") and Terrawinds Resources Corp. ("Terrawinds") have received an
administrative concession from the Canada Revenue Agency ("CRA") and Revenue
Quebec not to re-assess Unit Holders for their 2005 income tax years.
As previously announced, Terrawinds Resources Corp. ("Terrawinds") was
unable to complete the Canadian Renewable and Conservation Expense ("CRCE")
Phase of its originally planned 201MW wind energy project near
Rivière-du-Loup, Québec (the "Facility") by December 31, 2006 due to delays
experienced in obtaining the necessary permits, authorizations, approvals and
As a result, Terrawinds did not incur the qualifying Canadian Exploration
Expense ("CEE") that it expected to incur. Ordinarily, there would be adverse
tax consequences to Unit Holders. Based on the CEE incurred, the amount of CEE
allocated to Unit Holders for the Partnership's 2005 fiscal period would be
retroactively reduced from $7.69 per Unit to $0.85 per Unit. The business loss
allocated to Unit Holders for the 2005 fiscal year would not change.
However, CRA and Revenue Quebec have undertaken not to re-assess, at this
time, Unit Holders who deducted CEE in respect of the Partnership in their
2005 tax returns greater than $0.85 per Unit on the basis that Terrawinds
continues, and will continue, to work to complete the CRCE Phase of the
Facility in 2007 and in so doing will incur sufficient additional CEE.
If Terrawinds incurs sufficient additional CEE in 2007, CRA and Revenue
Quebec will not re-assess Unit Holders for their 2005 taxation years to reduce
the CEE they deducted. If the CRCE Phase is completed in 2007, Terrawinds
expects to incur sufficient additional CEE.
Accordingly, Unit Holders are not currently required to pay any
incremental taxes arising in their 2005 taxation year as a result of the
reduction in CEE or to request any amendments to their 2005 tax returns.
Incremental taxes payable for 2005 would only arise if Terrawinds does not
incur sufficient qualifying CEE in 2007.
If Terrawinds does not incur sufficient CEE in 2007, CRA and Revenue
Quebec (if applicable) will initiate the process of preparing a re-assessment
of each Unit Holder's 2005 taxation year. If this occurs, Unit Holders will
receive a Notice of Reassessment directly from CRA and Revenue Quebec (if
applicable) indicating the incremental federal and provincial income tax
payable for their 2005 income tax year. In this case, interest would only
accrue from May 1, 2007 on the incremental income tax based on each Unit
Holders share of the amount of CEE that Terrawinds failed to incur before the
end of 2007.
The description of the tax considerations of the administrative
concession from the tax authorities is applicable to Unit Holders who are
individuals. The tax considerations applicable to other investors, including
corporations, may differ. Unit Holders are encouraged to consult their own tax
advisors if they have questions on their specific income tax situations.
About SkyPower Wind Energy Fund LP
The Partnership has invested in the common shares, including flow-through
shares, of Terrawinds Resources Corp. ("Terrawinds"), a Canadian corporation
that will construct and operate approximately 114 wind turbines, including up
to 22 test wind turbines (the "CRCE Phase") for purposes of conducting a
120-day test (the "Test") and, if successful, construct and operate the
balance of the 114 wind turbines (the "Infill Phase") to create a 171MW wind
energy project near Rivière-du-Loup, Québec (the "Facility"). The Facility
will generate electricity for sale to Hydro-Québec pursuant to a 21-year power
purchase agreement (the "Power Purchase Agreement").
Certain statements included in this news release constitute
"Forward-Looking Statements" within the meaning of the Securities Act
(Ontario). Such forward-looking statements involve unknown risks,
uncertainties and other factors including risks of the financial viability of
the Facility, risks in obtaining permits, authorizations, rights-of-way and
approvals required for construction, construction risks, possible failure of
the test phase, risks relating to the Power Purchase Agreement, requirement
for additional financing, failure to obtain statutory or other relief from
certain taxes payable by Terrawinds, availability of government incentive
programs for wind facilities, variable wind resource and associated wind
energy production, turbine design and local climatic conditions, risks
relating to interconnection, reliance on key suppliers and one customer and
regulatory risks. These risks and uncertainties as well as additional
information are outlined in the Partnership's Third Quarter Report and other
continuous disclosure documents available on www.sedar.com. These risks may
cause the actual results, performance or achievements of the Partnership to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements.
For further information:
For further information: David Bacon, Vice President, Finance, (416)
979-4625, of SkyPower I GP Inc., General Partner to the SkyPower Wind Energy
Fund LP (www.skypowerwindenergyfund.com)