Leonard,
Wanted to loop you in on staffing and budget for the new Dunmore Energy Holdings engagement so we're aligned before things start moving.
**Matter Overview**
We opened the engagement on March 9 for Dunmore Energy Holdings Ltd. (Cayman-domiciled parent) — matter number 1016-00008, billing code 09417.00001. The scope at this stage is limited to scoping and structuring advice on an IRC § 6418 transferable tax credit monetization for Production Tax Credits generated by the Ridgeway Wind Project, a 250 MW wind facility in Custer County, Montana. The project is owned through Ridgeway Wind Energy LLC (Delaware), a wholly owned indirect subsidiary of DEH through Dunmore Renewables Inc. (Delaware).
Our client contacts are Marcus Petrov (VP, Tax) and Fiona Kessler (CFO) at DEH. The prospective credit buyer is Pinnacle Atlantic Partners LP (Delaware), a diversified financial services holding company that has an active § 6418 credit acquisition program. Pinnacle is represented by Hargrove, Liddell & Strauss LLP — Nathaniel Strauss is their lead partner on this.
To be clear, we are currently engaged only on the scoping phase. No definitive transaction documents have been negotiated, and the parties are still at the indicative term sheet stage.
**Staffing**
I'll serve as responsible partner and you as billing partner. For associates, I'd like to staff as follows:
- **Robert Jansen** — lead associate. Rob is a natural fit here given his experience with tax credit transfer structures and § 6418 mechanics. He'll run point on the substantive analysis and day-to-day coordination. - **Garrett Simmons** — working associate. Garrett will handle initial research, build out the financial model (PTC credit calculation and transfer economics), and prepare the issues list and entity/structure chart.
Rates for the team: I'm at $1,650/hr, you at $1,575/hr, Rob at $975/hr, and Garrett at $725/hr. I don't anticipate needing additional staffing for the scoping phase, though we'll want to reassess if and when the engagement expands to full transaction advisory.
**Budget and Fee Estimates**
The scoping-phase fee estimate is **$85,000–$125,000**, which is what we set out in the engagement letter to Marcus Petrov dated March 9. The scoping phase covers:
- Review of the Pinnacle indicative term sheet - Analysis of the IRC § 6418 transfer structure - Review of the Redstone Capital Bank Credit Agreement (dated March 28, 2023) for lender consent requirements — specifically Section 7.14 - Preparation of a structuring memorandum, issues list, and initial term sheet commentary
If the engagement expands to full transaction advisory — meaning we move to drafting and negotiating the definitive Transfer Agreement, coordinating with the escrow agent (Commonwealth Fiduciary Trust Company), managing insurance placement with Northfield Specialty Insurance Co. through broker Corbin Hale & Associates Inc., and shepherding the lender consent process with Redstone Capital Bank — I'd estimate fees in the range of **$350,000–$500,000**. The expansion decision will largely depend on whether DEH is comfortable with the proposed deal terms and the parties elect to move to definitive documentation.
For context on scale: the estimated Year 1 PTC is approximately $25.3 million, based on an effective credit rate of $0.03025/kWh (reflecting the 5x bonus credit multiplier and the 10% energy community adder). Pinnacle's proposed transfer price is $0.92 per dollar of credit, which would yield approximately $23.3 million in Year 1 transfer consideration and an estimated $232.76 million over the 10-year credit period. Our fee estimate — even at the upper end of the full transaction range — is well within market for a deal of this size.
**Coordination with Grayson Birch & Co. LLP**
DEH has separately engaged Grayson Birch & Co. LLP as independent tax advisor. The lead partner is Howard Ellison in their National Tax — Renewable Energy practice in Washington, DC. Grayson Birch's scope includes the PTC eligibility memorandum, cost segregation analysis, and the IRS Energy Credits Online pre-filing registration under Treas. Reg. § 1.6418-4 (registration is pending for TY2025).
We need to delineate clearly between our legal structuring and transaction documentation role and Grayson Birch's tax advisory and registration work. The last thing anyone needs is scope overlap and duplicative billing — Marcus will notice, and rightly so. I sent him an email yesterday (March 10) requesting an introduction to Howard Ellison so we can get the teams coordinating early.
On the substance, I anticipate that Grayson Birch's work product on PTC eligibility — including their analysis of prevailing wage and apprenticeship compliance, and energy community qualification for Custer County — will feed directly into our structuring memorandum and will underpin the seller representations in any Transfer Agreement we draft.
We'll also need to coordinate with Meridian Technical Advisors LLC (Dr. Paul Marlowe Commerce Bank, independent engineer) on the energy production estimate and COD certification. COD was November 14, 2025. Both the production estimate and the COD certification are foundational to the credit calculations, so we'll need those in hand before we can finalize our structuring analysis.
**Proposed Scoping Phase Timeline**
Here's how I see the next several weeks playing out:
- **Week of March 16:** Receive and review due diligence documents from DEH — we've requested the Ridgeway Wind Energy LLC operating agreement, the Redstone Credit Agreement and Depositary Agreement, the PPA with Great Plains Municipal Power Authority, COD certification, Meridian energy production reports, and the Pinnacle indicative term sheet. - **Week of March 23:** Initial scoping call with Marcus Petrov and Fiona Kessler; introductory call with Howard Ellison at Grayson Birch. - **By approximately April 1–4:** Deliver preliminary issues list identifying open legal, tax, structural, and regulatory issues. - **By approximately April 7–11:** Deliver structuring memorandum covering the IRC § 6418 transfer mechanics, PTC computation, lender consent analysis, indemnity/holdback mechanics, and recapture risk. - **By approximately April 14–18:** Deliver term sheet review memorandum with our commentary and recommended negotiation positions on the Pinnacle indicative term sheet.
These timelines are contingent on timely receipt of documents from the client and smooth coordination with Grayson Birch and Meridian. Rob Jansen will prepare an internal advisor coordination memo mapping all advisor roles and deliverable dependencies so everyone is clear on sequencing.
**Next Steps**
Let me know if you're comfortable with the staffing and budget parameters as outlined. I'll keep you updated as the scope crystallizes. I'd suggest we touch base later in the week once documents start coming in from Marcus's team — shouldn't be much for you to focus on until then.
Thanks, Leonard.
Best,
**Sylvia Hartwell** Partner, Tax Calderwood & Harkness LLP 700 Fifth Avenue, 33rd Floor New York, NY 10019 T: (212) 554-8100 E: shartwell@calderwoodharkness.com
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