Bloomberg News

New Clean-Energy Loan Guarantees Planned by Obama Administration

April 05, 2012

The U.S. Energy Department plans to issue new loan guarantees for clean-energy companies amid criticism from congressional Republicans that a previous effort wasted taxpayer money.

The agency has $170 million from Congress to support cutting-edge projects, David Frantz, acting executive director of the agency’s loan office, said today in a letter to lawmakers.

Companies denied funding from a program financed by the 2009 economic stimulus are being asked to re-apply. Solyndra LLC won $535 million in loan guarantees from the earlier effort before its collapse prompted Republicans to fault President Barack Obama’s administration for seeking to pick “winners and losers” among energy companies.

The loan program created jobs and helped “the United States keep pace in the fierce global race for clean-energy technologies,” Frantz wrote to Senators Jeff Bingaman, a New Mexico Democrat who is the chairman of the Energy and Natural Resources Committee, and Lisa Murkowski of Alaska, the top Republican on the panel.

Republicans including House Energy and Commerce Committee Chairman Fred Upton of Michigan had sought loan guarantees for companies in their districts before Solyndra halted operations in September.

Upton, whose committee is investigating Solyndra, has since said the administration missed “red flags” in awarding the guarantee in 2009. Representative Darrell Issa, a California Republican and chairman of the House Oversight and Government Reform Committee, has accused the Energy Department of mismanaging the loan program.

Agua Caliente

The 2009 economic stimulus provided more than $2.5 billion to finance clean-energy loan guarantees. The program eventually supported about $16 billion in projects, including the Agua Caliente solar development in Yuma County, Arizona, backed by NRG Energy Inc. (NRG:US), which Frantz said would be the world’s biggest photovoltaic installation when finished later his year.

That loan-guarantee program ended on Sept. 30. In May, the Energy Department notified more than three dozen companies that they wouldn’t qualify before the deadline. Projects needed to be under construction before the end of September.

A budget agreement negotiated by Senate Democrats and House Republicans before Solyndra went out of business included $170 million to finance clean-energy loans.

Frantz said he didn’t know how many projects would win backing in the fresh effort. Conditional commitments will be made “over the next several months,” he said. Companies have until April 27 to apply.

Separately, Chicago-based Exelon Corp. (EXC:US) and First Solar Inc. (FSLR:US) in Tempe, Arizona, said they received the first advance of a previously approved U.S. loan guarantee valued at $646 million.

First Solar is building Antelope Valley (30778MF:US) Solar Ranch One, a 230-megawatt project, and will run and maintain it for Exelon, the owner. It will generate enough electricity to power the equivalent of 75,000 average California homes, according to a statement from the companies.

To contact the reporter on this story: Jim Snyder in Washington at jsnyder24@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net


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Companies Mentioned

  • NRG
    (NRG Energy Inc)
    • $34.55 USD
    • -0.81
    • -2.34%
  • EXC
    (Exelon Corp)
    • $33.78 USD
    • -0.58
    • -1.72%
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