Ambridge’s Interconnection Tax Insurance policy has been developed to address the federal tax treatment of payments and transfers made to the owner of a transmission grid (usually a utility) in connection with the construction of the facilities necessary to allow independent power plants to convey their electricity to their customers. The connecting facility is referred to as the Interconnection or the Intertie. The owner of a transmission grid traditionally has required that the independent power plant secure a Private Letter Ruling from the Internal Revenue Service regarding the tax-free nature of the payment, pay an amount equal to the tax (i.e. a “gross-up”), or provide some sort of other security in the event that the payment or transfer is deemed not to be tax-free. Now, an alternative to these inefficient and expensive methods of addressing this tax risk is available; a new Tax Insurance Policy for Interconnection Agreements.