Energy Loan Program with No Projects May Get Funds
Source: Bloomberg (1/29/09)
"Congress is planning to direct at least $10 billion in economic stimulus funding to an Energy Department loan guarantee program. . ."
The new money is intended to generate $100 billion in loans for renewable energy and transmission projects, according to Senator Byron Dorgan, a North Dakota Democrat. Congress previously approved at least $38.5 billion for clean-energy loan guarantees, and not a single project was funded.
Lawmakers, trying to encourage a shift to clean-energy sources such as wind and solar, have sought to stretch government funds by using loan guarantees instead of grants or direct support for renewable energy projects.
The Senate's economic stimulus plan includes about $78 billion overall for Energy Department programs or tax breaks for energy projects. The House plan would spend about $10 billion less on such projects.
A July Government Accountability Office report found the Energy Department's loan guarantee program lacked "adequate management and internal controls."
Energy officials hadn't determined the resources needed to carry out the program, set policies for processing applications or monitor the loans, the report found. GAO, the investigative agency for Congress, also said the Energy Department had no clear idea of program costs or how it would identify eligible lenders.
Congress approved the loan-guarantee program as part of energy legislation in 2005. It called for the government to guarantee repayment of loans made to fund energy projects such as nuclear power plants, coal projects and renewable-energy investments.
Of the $38.5 billion already authorized, the department is planning to distribute $18.5 billion in guarantees for nuclear plants; $10 billion for renewable or energy-efficient systems; $8 billion for clean coal; and $2 billion for processing of nuclear fuel.