17 Groups: Proposed Energy Deployment 'Bank' Will
Thwart 'Cleanest, Greenest and Least Risky' Energy Alternatives
Major Risk to Taxpayers Seen in Potentially Unlimited Loan Guarantee/Bailout
Provisions
WASHINGTON, June 17 /PRNewswire-USNewswire/
In a letter to the members of the U.S. Senate Energy and Natural
Resources Committee, 17 major groups - including the Union of Concerned
Scientists, the League of Conservation Voters and Sierra Club - warned that
the proposed Clean Energy Deployment Administration in the American Clean
Energy Leadership Act of 2009 will not "reduce greenhouse gas emissions in
the most efficient, environmentally sound manner possible." The groups also
warned that Senate's current CEDA proposal will "pose unnecessary and
potentially enormous risks to our environment and to the U.S. taxpayer."
The full text of the letter reads as follows:
"We support the financing of clean energy technologies to promote the
domestic development and deployment of technologies that will reduce
greenhouse gas emissions in the most efficient, environmentally sound manner
possible. However, the proposed Clean Energy Deployment Administration (CEDA)
will not achieve these important goals and will in fact, as drafted, pose
unnecessary and potentially enormous risks to our environment and to the
U.S. taxpayer. CEDA could allow for potentially unlimited loan guarantees,
disproportionately benefit more expensive and risky technologies, and fail
to ensure that the cleanest technologies are prioritized. We urge you to
require congressional authority for loan guarantees, cap how much any one
technology or industry can benefit from this program, and ensure that the
program prioritizes those technologies that reduce carbon emissions on a
cost-effective basis in the shortest time possible.
One of the biggest dangers of the 21st Century Energy Technology Deployment
Act (S.949) is the exemption from Sec. 504(b) of the Federal Credit Reform
Act (FCRA), a valuable Congressional oversight tool. By exempting the
program from the requirement to comply with FCRA, CEDA would circumvent the
appropriations process and rely solely on the model that the Office of
Management and Budget (OMB) uses to calculate the risk of default and how
much subsidy cost (the risk of default) must be paid in order to get a loan
guarantee. According to both the Congressional Budget Office and the
Government Accountability Office, this calculation is very difficult to
determine accurately and is likely to be underestimated, leaving U.S.
taxpayers to bail out energy companies when they default.
Allowing CEDA to issue potentially unlimited loan guarantees on the basis of
this speculative calculation flies in the face of good governance and
accountability to the U.S. taxpayer. If the OMB subsidy calculation is off,
even by a small amount, then the potential taxpayer exposure could be
enormous, especially given the history of defaults and cost overruns
associated with certain technologies. This will be especially true if the
program authorizes large loans for multiple capital intensive projects
requiring billions of dollars in credit support. If the purpose of the 21st
Century Energy Technology Deployment Act is to promote the domestic
development and deployment of innovative clean energy technologies with
varying and ambiguous degrees of risk, then this is all the more reason to
require compliance with FCRA, which was created to measure the cost of
federal credit programs from a budgetary standpoint.
The 21st Century Energy Technology Deployment Act must also include a cap on
the financial assistance that could be provided to any one technology. The
diversity of technologies eligible for loan guarantees under the program
means that less expensive and less risky technologies will be competing for
financial assistance with technologies that are highly capital intensive and
inherently more risky. In order to have a truly diverse portfolio of clean
energy technologies receiving support, there must be a limit on the amount
of financial assistance that any one technology can receive. Absent a cap,
the CEDA investment portfolio could become disproportionately weighted in
favor of capital intensive technologies by virtue of the fact that they
require more financing for deployment. Higher costs must not advantage one
technology over another. The portfolio should be weighted accordingly to
ensure balance, diversity and ensure that the cleanest, greenest and least
risky technologies are brought on line first.
Finally, the legislation should include a true greenhouse gas metric that
would ensure that funding priority will be given to those technologies that
reduce the greatest amount of greenhouse gases, per dollar invested, in the
shortest amount of time. Given that the role of CEDA is to facilitate the
deployment of innovative energy technologies that will reduce carbon output
and help our country combat climate change, a greenhouse gas metric should
be the central criteria for determining how financial assistance is
allocated. Putting a priority on those technologies that reduce the greatest
amount of carbon emissions using the least amount of money in the shortest
amount of time assures that we will be addressing the climate crisis in the
most efficient, cost-effective manner while limiting financial risk to the
U.S. taxpayer and putting people back to work in new green jobs as soon as
possible.
We urge you to make changes to the CEDA bill that would protect U.S.
taxpayers and prioritize the cleanest and most economical energy
technologies."
The bill was signed by: Alan Nogee, Program Director, Clean Energy, Union of
Concerned Scientists; Ken Bossong, Executive Director, SUN DAY Campaign;
Sara Barczak, Program Director, High Risk, Southern Alliance for Clean
Energy; Dave Hamilton, Director, Global Warming and Energy Program, Sierra
Club; Dan Becker, Director, Safe Climate Campaign; Tyson Slocum, Director,
Energy Program, Public Citizen; Michele Boyd, Director, Safe Energy Program,
Physicians for Social Responsibility;
Michael Mariotte, Executive Director, Nuclear Information and Resource
Service; Tiernan Sittenfeld, Legislative Director, League of Conservation
Voters; Jim Riccio, Nuclear Policy Analyst, Greenpeace; Sandra Schubert,
Director of Government Affairs, Environmental Working Group; Carol Werner,
Executive Director, Environmental and Energy Study Institute; Anna Aurilio,
Director, Washington DC Office, Environment America; Lynn Thorp, National
Campaigns Coordinator, Clean Water Action; William J. Snape, III, Senior
Counsel, Center for Biological Diversity; Kevin Kamps, Radioactive Waste
Watchdog, Beyond Nuclear; and Susan Gordon, Director, Alliance for Nuclear
Accountability.
The Union of Concerned Scientists is the leading U.S.
science-based nonprofit organization working for a healthy environment and a
safer world. Founded in 1969, UCS is headquartered in Cambridge, Massachusetts,
and also has offices in Berkeley, Chicago and Washington, D.C. To subscribe or
visit go to: http://www.ucsusa.org
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