White House Doubles Down on Green-Tech Loan Program

Energy Secretary and hair fashion pioneer Edward Moniz.
National Journal
Ben Geman
Add to Briefcase
See more stories about...
Ben Geman
April 2, 2014, 2:43 p.m.

Solyn­dra be damned.

The Obama ad­min­is­tra­tion is de­fi­antly re­viv­ing a green-tech­no­logy loan pro­gram that be­came a mag­net for GOP polit­ic­al at­tacks.

It’s ba­sic­ally the same pro­gram that fin­anced the in­fam­ous sol­ar-pan­el com­pany Solyn­dra, which fell apart in 2011, tak­ing a half-bil­lion dol­lars in fed­er­al loans along with it.

Solyn­dra was among a num­ber of Obama-backed green-en­ergy or auto com­pan­ies that either col­lapsed or struggled badly, turn­ing the pro­gram in­to a punch­ing bag for Re­pub­lic­ans and spark­ing GOP-led con­gres­sion­al probes.

But the White House and its al­lies have long said the pro­gram has been a big suc­cess in the main des­pite some flops.

En­ergy Sec­ret­ary Ern­est Mon­iz, on the job since mid-2013, has been a staunch de­fend­er of fed­er­al green-tech loan pro­grams. And now his plan to re­vive them seems to be pick­ing up speed.

On Wed­nes­day Mon­iz said that the de­part­ment would prob­ably throw open the door to new ap­plic­a­tions for re­new­able-en­ergy pro­ject loan guar­an­tees dur­ing the second quarter of this year, a some­what more pre­cise fore­cast than his pre­vi­ous es­tim­ate of “re­l­at­ively soon.”

Also Wed­nes­day, the En­ergy De­part­ment said it’s re­boot­ing the sep­ar­ate Ad­vanced Tech­no­logy Vehicles Man­u­fac­tur­ing (ATVM) loan pro­gram in pre­par­a­tion for of­fer­ing the first new loans in years.

That pro­gram has pre­vi­ously sup­por­ted Ford, Nis­san, and the elec­tric-vehicle com­pan­ies Tesla, which re­paid its loan ahead of sched­ule, and Fisker, which fell apart after draw­ing nearly $200 mil­lion in fed­er­al loans (DOE re­covered $53 mil­lion, and the com­pany is now un­der new own­er­ship).

DOE’s loan-pro­grams of­fice, in a let­ter today to auto equip­ment makers, an­nounced that pro­jects to man­u­fac­ture a “broad range” of com­pon­ent tech­no­lo­gies are eli­gible for loans.

The ATVM pro­gram, which ac­cord­ing to the de­part­ment can provide an­oth­er $16 bil­lion worth of new loans, also said it has taken steps to make the ap­plic­a­tion pro­cess faster and more re­spons­ive.

“Mo­tor vehicle parts man­u­fac­tur­ers play a sig­ni­fic­ant role in the de­vel­op­ment and de­ploy­ment of new tech­no­lo­gies to meet the de­mand for fuel-ef­fi­cient vehicles and we be­lieve the ATVM Loan Pro­gram can play an im­port­ant fin­an­cing role as the in­dustry es­tab­lishes the next gen­er­a­tion of man­u­fac­tur­ing fa­cil­it­ies in the United States,” Mon­iz said in a state­ment.

The loan pro­grams for low-emis­sions tech­no­logy pro­jects and green-car man­u­fac­tur­ing were first au­thor­ized in bi­par­tis­an 2005 and 2007 en­ergy laws. But loans for re­new­able-en­ergy pro­jects, aided by the 2009 stim­u­lus law, didn’t be­gin un­til Obama was in of­fice. Nor did the ATVM loans.

In 2009-11, the two pro­grams sup­por­ted auto­makers and an ar­ray of sol­ar and wind-power pro­jects, a few sol­ar-equip­ment makers (in­clud­ing Solyn­dra), and oth­er ven­tures.

The de­part­ment re­cently fi­nal­ized a loan guar­an­tee for a nuc­le­ar power pro­ject in Geor­gia, and it’s tak­ing ap­plic­a­tions for pet­ro­leum- and coal-re­lated pro­jects that trap car­bon emis­sions.

For the next wave of loan guar­an­tees, however, the de­part­ment won’t have as much money to work with as it did sev­er­al years ago, when it backed big pro­jects like the massive Ivan­pah sol­ar sta­tion in Cali­for­nia.

Peter Dav­id­son, the head the DOE loan pro­gram, re­cently sug­ges­ted that a fo­cus of the re­vived pro­gram would be ini­ti­at­ives that help in­teg­rate re­new­able power onto the grid, as op­posed to big power-gen­er­a­tion pro­jects.

While polit­ic­al at­tacks against the loan pro­gram have died down, they haven’t gone away en­tirely, as Re­pub­lic­ans con­tin­ue to ar­gue that the green-tech loan pro­grams have been waste­ful, un­needed, and poorly run.

In­deed, the House Re­pub­lic­ans’ budget plan un­veiled this week would block fu­ture loans. But the pro­pos­al is only a sym­bol­ic state­ment of party prin­ciples; the top­ic is no longer front-and-cen­ter for the House GOP, at least for now.

And while the pro­gram has taken its lumps, Re­pub­lic­ans who used two House com­mit­tees to probe it nev­er un­covered evid­ence to sup­port their most sa­la­cious claims.

In par­tic­u­lar, a lengthy En­ergy and Com­merce Com­mit­tee probe com­pleted in Au­gust 2012 didn’t back up ac­cus­a­tions — echoed of­ten by Re­pub­lic­ans and their al­lies on the 2012 cam­paign trail — that fed­er­al loans to Solyn­dra and oth­er pro­jects were re­wards for polit­ic­al dona­tions.

The in­vest­ig­a­tions did un­earth rev­el­a­tions and in­tern­al doc­u­ments that were em­bar­rass­ing and polit­ic­ally dam­aging for the Obama ad­min­is­tra­tion, such as emails show­ing pres­sure to fi­nal­ize the Solyn­dra deal des­pite in­tern­al con­cerns.

Mon­iz, however, is seek­ing to play of­fense in sup­port of the loan pro­gram. He’s happy to make the case that the over­all loan port­fo­lio is per­form­ing strongly.

“We have been tak­ing the po­s­i­tion quite con­sist­ently — and we’re happy to dis­cuss it any place, any time — that the pro­gram as a port­fo­lio has done ex­tremely well,” Mon­iz told re­port­ers after testi­fy­ing on Wed­nes­day be­fore the GOP-led House Ap­pro­pri­ations Com­mit­tee in a two-hour-plus hear­ing that was free of at­tacks on the pro­gram.

The $30 bil­lion-plus port­fo­lio’s losses have been about 2.5 per­cent, ac­cord­ing to the En­ergy De­part­ment. Mon­iz noted that the pro­gram has used only a small amount of the “loan loss re­serve” that Con­gress provided.

He even saw room for some loan-pro­gram hu­mor.

“Maybe I’m wor­ried that the ar­gu­ments will change,” Mon­iz told re­port­ers. “That we’re not tak­ing enough risk.”

What We're Following See More »
ANOTHER NUCLEAR OPTION?
Byrd Rule Could Trip Up Health Legislation
12 hours ago
THE DETAILS

"Even if House Republicans manage to get enough members of their party on board with the latest version of their health care bill, they will face another battle in the Senate: whether the bill complies with the chamber’s arcane ... Byrd rule, which stipulates all provisions in a reconciliation bill must affect federal spending and revenues in a way that is not merely incidental." Democrats should have the advantage in that fight, "unless the Senate pulls another 'nuclear option.'”

Source:
ONE WEEK
Senate Votes To Fund Government
1 days ago
BREAKING
ON TO SENATE
House Passes Spending Bill
1 days ago
BREAKING

The House has passed a one-week spending bill that will avert a government shutdown which was set to begin at midnight. Lawmakers now have an extra week to come to a longer agreement which is expected to fund the government through the end of the fiscal year in September. The legislation now goes to the Senate, where it is expected to pass before President Trump signs it.

PRESIDENT CALLS MEDICAID FUNDS A “BAILOUT”
Puerto Rico Another Sticking Point in Budget Talks
2 days ago
THE DETAILS

President Trump’s portrayal of an effort to funnel more Medicaid dollars to Puerto Rico as a "bailout" is complicating negotiations over a continuing resolution on the budget. "House Democrats are now requiring such assistance as a condition for supporting the continuing resolution," a position that the GOP leadership is amenable to. "But Mr. Trump’s apparent skepticism aligns him with conservative House Republicans inclined to view its request as a bailout, leaving the deal a narrow path to passage in Congress."

Source:
POTENTIAL GOVERNMENT SHUTDOWN?
Democrats Threaten Spending Bill Over Obamacare
2 days ago
BREAKING

Democrats in the House are threatening to shut down the government if Republicans expedite a vote on a bill to repeal and replace Obamacare, said Democratic House Whip Steny Hoyer Thursday. Lawmakers have introduced a one-week spending bill to give themselves an extra week to reach a long-term funding deal, which seemed poised to pass easily. However, the White House is pressuring House Republicans to take a vote on their Obamacare replacement Friday to give Trump a legislative victory, though it is still not clear that they have the necessary votes to pass the health care bill. This could go down to the wire.

Source:
×
×

Welcome to National Journal!

You are currently accessing National Journal from IP access. Please login to access this feature. If you have any questions, please contact your Dedicated Advisor.

Login