Republican lawmakers are formalizing their assault on Department of Energy (DOE) loan guarantees for young clean energy companies with the “No More Solyndras Act.”
The tagline is: Legislation Will Ensure Taxpayers Are Never Again Left on the Hook for the Administration’s Risky Bets
Even though two years of investigations uncovered no wrong-doing, and DOE’s program was started in 2005 under President Bush, Solyndra continues to be a Republican cause celebre.
Dissatisfied that their endless investigation has produced no results, they are taking action through legislation.
Introduced by House Energy and Commerce Committee Chair Fred Upton (R-MI) and Oversight and Investigations Subcommittee Chair Cliff Stearns (R-FL), the draft bill will be discussed among the two panels tomorrow.
Here’s what the bill would do:
DOE still has the power and budget to issue $34 billion in loan guarantees for applications submitted prior to 2012.
1. But the bill would bar DOE from granting loan guarantees to renewable energy projects for applications submitted after 2011 (which sounds like no more loan guarantees).
2. DOE would be required to report to Congress energy committees the terms of the guarantee and the technology it supports, purportedly to increase transparency.
3. There would be new review requirements including signoff from the Treasury Department, and DOE would be required to justify anything the Treasury didn’t approve.
4. DOE would be prohibited from restructuring the terms of any guarantee without consulting with Treasury and there would be a provision that forbids DOE from subordinating US taxpayer dollars to company investors in the case of default.
5. And what about the $10 billion in conditional commitments DOE made for two new nuclear plants? They can still move forward.
Yet, nuclear plants are proven to be a far more expensive (note that $10B for one plant compared to the $550M loan for Solyndra), risky bet than any renewable energy company or project.
“Our investigation discovered that despite repeated warnings by Obama’s own experts at DOE and OMB, a half-billion dollars for Solyndra was rushed out the door, and when Solyndra was out of cash, the administration doubled down and restructured the risky loan, putting the solar company’s wealthy investors ahead of taxpayers,” say Upton and Stearns.
The Obama administration has repeatedly contended Solyndra’s demise was caused by its inability to compete against low-cost Chinese solar companies, as has been the case with so many older, extremely established companies like Q-Cells and Solar Millennium, which also filed for bankruptcy.
Abound, Beacon and Ener1, the other recipients of DOE’s loan guarantees that have shut their doors, will not be anywhere near a total loss for taxpayers. Solyndra is the only company in that category out of the $35 billion in guarantees DOE handed out.
An independent review of DOE’s renewable energy loan program concluded its portfolio is expected to perform well and holds less risk than Congress originally anticipated when they approved the program under President Bush. It also found DOE has done a good job of balancing the inevitable risks in the range of projects it selected.
But conservatives have used the situation to try to convince the US public that investments in renewable energy technologies are unreliable and risky. In January, the Americans for Prosperity advocacy group funded by the billionaire Koch brothers launched a $6 million television ad campaign slamming the Solyndra loan guarantee.
Here”s the draft “No More Solyndras Act”: