Clean Energy Loans Targeted during Hearings
A U.S. House committee put the Obama
administration clean energy policy on trial as it
considered legislation that would essentially end
the federal loan guarantee program for clean energy
technologies.
Dubbed the
“No More Solyndras Act,” the law would sunset
the program with the applications that were filed by
last Sept. 30. The bill is named after the showcase
solar manufacturing company that received the first
loan guarantee and later declared bankruptcy.
Taxpayers are on the hook for $527m.
“There’s more than enough evidence to show that this
program is a failure,” said Rep. Ed Whitfield, R-Ky.
Democrats characterized the hearing as grandstanding
before the election for a bill that has no chance of
Senate passage or an eventual signature by the
president. The House Energy Committtee convened the
hearing, which was comprised of mebers of two of its
subcommittees: Energy and Power, and Oversight and
Investigations.
“They are using inflammatory press releases,” to
disparage successes of the program, said Rep. John
Dingell, D-Mich.
The Energy Policy Act of 2005 set up the program and
it was launched in 2007 under former President Bush.
David G. Frantz, Acting Executive Director of the
Loan Programs Office U.S. Department of Energy, was
grilled by the committee. He said 87% of the loans
have been made to successful projects, while
Congress anticipated some failures when it passed
the legislation.
Frantz has been involved with the program under Bush
and Obama and defended its record of review and
approval of projects.
Committee chair Rep. Cliff Stearns, R-Texas, noted
that three of the first five loan guarantee
recipients are bankrupt.
Solyndra and energy storage company Beacon Power
declared bankruptcy in 2011. Frantz said the
government has recovered 70% of the $43m Beacon got
under its loan guarantee. Abound Solar declared
bankruptcy last week. It received a $400m loan
guarantee but had only drawn down $70m as it failed
to reach performance benchmarks and funds were shut
off late last year.
Frantz said the loan office has committed or closed
$35 billion in direct loans and loan guarantees,
which finance nearly three dozen projects, with
total project costs greater than $55bn.
He added the draft legislation would hamstring DOE’S
ability to continue the program. The major part of
the hearing considered the ability of the government
to subordinate its interest behind private investors
when a company is failing.
Solyndra’s loan was restructured in such a way that
the government moved further downs the lie in the
bankruptcy and is not going to be repaid.
Frantz said there was no other way to attract
private capital to the failing company. “this is a
tool of last resort,” he said.
Republicans framed it as a program run amok filled
with shortcuts to expedite loans that benefitted
politically connected donors.
The Solar Energy Industries Association (SEIA),
as expected didn’t like the tone of the hearing and
immediately released a statement to that effect.
“Unfortunately, the discussion draft – as was noted
on multiple occasions in the legislative hearing –
would ‘throw the baby out with the bathwater.’ The
loan program has been utilized on a bipartisan basis
to leverage private capital to promote
transportation, health care, education, housing and
energy infrastructure policies.
"The provision in the discussion draft that sunsets
DOE’s loan program would hinder our nation’s ability
to develop innovative energy infrastructure
projects. In solar alone, this program has achieved
a number of notable successes. Chief among these are
11 utility‐scale solar power plants in the
Southwest, totaling 2,700 megawatts – enough to
power 500,000 homes,” SEIA President and CEO Rhone
Resch said
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