Marcus,
Thank you for getting the engagement letter across the finish line yesterday. We're pleased to have the formalities behind us and are looking forward to digging in on this.
For the record, the executed engagement letter dated March 9, 2026, confirms Calderwood & Harkness's scope as follows: scoping and structuring advice on the proposed IRC § 6418 transferable tax credit monetization for Production Tax Credits generated by the 250 MW Ridgeway Wind Project located in Custer County, Montana. Our matter number is **1016-00008** and the billing code is **09417.00001** — please reference these on any correspondence or document transmittals to the team.
Given that the project reached COD on November 14, 2025, we'd like to move promptly. Among other things, IRS pre-filing registration for TY2025 credits on the Energy Credits Online portal will need to be addressed in coordination with the transfer timeline, and we want to make sure the structuring analysis is well advanced before that process becomes time-sensitive.
I've set out below a proposed scoping call agenda, our initial document request, and one coordination item regarding Grayson Birch.
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**1. Initial Scoping Call — Week of March 16**
We'd like to schedule an initial scoping call during the week of March 16. I'd ask that both you and Fiona Kessler join, as we'll want to cover structural and tax considerations alongside the economic aspects of the proposed transfer. On our side, the call will include me, Robert Jansen (lead associate), and Garrett Simmons (working associate).
We'd propose covering the following topics:
- DEH's objectives for the PTC transfer and any timing constraints driving the transaction calendar. - Current status of discussions with Pinnacle Atlantic Partners LP as the prospective buyer. - DEH's federal income tax position and the rationale for a § 6418 transfer rather than direct utilization — in particular, we understand DEH's federal income tax liability is limited due to legacy intangible drilling cost deductions and prior net operating losses, and we'd like to understand the forward-looking profile in more detail. - Key commercial terms in the Pinnacle indicative term sheet, including the proposed transfer price of $0.92 per $1.00 of credit, the 15% indemnity holdback, and the 36-month escrow arrangement at Commonwealth Fiduciary Trust Company. - Lender consent requirements under the Redstone Capital Bank Credit Agreement. - Coordination with other advisors — Grayson Birch & Co. LLP, Meridian Technical Advisors LLC, and Corbin Hale & Associates Inc. — so we can map the respective work streams and avoid gaps or overlap.
Could you suggest two or three time slots that work for you and Fiona? We have good flexibility that week.
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**2. Document Request**
To allow the team to begin substantive analysis in advance of the call, I'd appreciate it if you could arrange for the following to be provided to us at your earliest convenience:
1. **Ridgeway Wind Energy LLC — Operating Agreement** (or LLC Agreement), including any amendments, reflecting Dunmore Renewables Inc. as sole member.
2. **Credit Agreement** dated March 28, 2023, between Ridgeway Wind Energy LLC and Redstone Capital Bank, N.A., including all amendments, side letters, and schedules. We are particularly interested in Section 7.14 (restrictions on transfer, sale, or assignment of tax attributes) and any related consent provisions.
3. **Depositary Agreement** dated March 28, 2023, between Ridgeway Wind Energy LLC and Redstone Capital Bank, N.A., including the revenue account waterfall provisions. We'll need to assess whether transfer proceeds will be subject to the waterfall or can be carved out.
4. **Power Purchase Agreement** with Great Plains Municipal Power Authority, executed June 12, 2023 (20-year fixed-price PPA at $38.50/MWh), including any amendments or supplements.
5. **COD Certification** for the Ridgeway Wind Project (COD: November 14, 2025) — whether issued by the independent engineer, the offtaker, or internally.
6. **Energy production reports and estimates** prepared by Meridian Technical Advisors LLC (Dr. Paul Marlowe Commerce Bank, PE), including the P50 energy production estimate — which we understand reflects a net capacity factor of 38.2% and estimated annual generation of approximately 836,220,000 kWh — and any turbine performance reports available to date.
7. **Pinnacle Atlantic Partners LP — Indicative Term Sheet** for the proposed IRC § 6418 PTC transfer, as received from Pinnacle or its counsel, Hargrove, Liddell & Strauss LLP (Nathaniel Strauss).
8. **Generator Interconnection Agreement** with NorthStar Transmission Holdings LLC, executed September 3, 2024 (MISO Queue Position J-1147), to the extent relevant to credit eligibility or project qualification.
9. Any **preliminary work product** from Grayson Birch & Co. LLP (Howard Ellison) relating to PTC eligibility analysis, cost segregation, prevailing wage and apprenticeship compliance documentation, or energy community qualification for Custer County under IRC § 45(b)(11)(B).
10. Any **correspondence or proposals** from Corbin Hale & Associates Inc. (Steven Rask) regarding tax credit recapture insurance or transfer indemnity insurance placement with Northfield Specialty Insurance Co.
A virtual data room or secure file transfer would be fine — whatever is most convenient for your team. If certain items will take longer to pull together, please don't hold the rest; we're happy to receive documents on a rolling basis.
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**3. Introduction to Grayson Birch & Co. LLP**
We'll need to coordinate closely with Howard Ellison and his team at Grayson Birch on several overlapping work streams, including:
- PTC eligibility and computation analysis — the effective credit rate of $0.03025/kWh, reflecting the base rate, the 5x bonus multiplier for prevailing wage and apprenticeship compliance, and the 10% energy community adder. - IRS pre-filing registration requirements under Treas. Reg. § 1.6418-4. - Cost segregation analysis for the project. - Treatment of transfer consideration — specifically, the non-taxable adjustment to the buyer's tax liability versus the gross income treatment for the seller under § 6418.
Would you be able to make an email introduction to Howard so that we can establish a working relationship and delineate the respective scopes? Our intent is for C&H to focus on legal structuring, transaction documentation, and counterparty negotiation with Hargrove, Liddell & Strauss, while Grayson Birch's work on the underlying tax eligibility, credit computation, and IRS registration mechanics will serve as a critical input to the structuring memorandum we'll prepare. Getting that coordination set up early will help us avoid duplication of effort on both sides.
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**4. Next Steps and Budget**
We're genuinely excited about this engagement. The Ridgeway project represents a significant monetization opportunity — on our preliminary math, the estimated 10-year aggregate PTC value is approximately $253 million (nominal), with potential transfer consideration of approximately $232.76 million at the proposed $0.92 pricing. Getting the structure right at the outset will be well worth the time invested.
Once we've received the requested documents and completed the scoping call, the team will prepare a structuring memorandum and preliminary issues list. We expect to deliver that within approximately three to four weeks of having the key inputs in hand.
As a reminder, the scoping-phase fee estimate is $85,000–$125,000 as set forth in the engagement letter. We will keep you and Fiona apprised of the budget as the work progresses and will flag promptly if we see anything that could push us toward the upper end or beyond.
Please don't hesitate to call or email in the interim if questions come up. I'm available anytime.
Best regards,
**Sylvia Hartwell** Partner, Tax Calderwood & Harkness LLP 700 Fifth Avenue, 33rd Floor New York, NY 10019 T: (212) 554-7100
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