Republicans set their sights on another Energy Department program

Top Republicans on the House Natural Resources Committee pressed the Energy Department Wednesday to halt a program for financing power line projects, arguing that it puts taxpayers at “unacceptable financial risk.”

The Republican lawmakers, in a letter to Energy Secretary Steven Chu, point to a DOE inspector general report released this week that raises major questions about the program.

The report — written by DOE Inspector General Gregory Friedman — cites problems with an electric transmission project that received $152 million in stimulus-law financing authorized under the program, which is operated by the Energy Department’s Western Area Power Administration (WAPA).

“The Department of Energy (DOE) should cease and desist with any and all WAPA borrowing authority expenditures and activities,” committee Chairman Doc Hastings (R-Wash.) and Rep. Tom McClintock (R-Calif.), the chairman of the panel’s power subcommittee, write in the letter.

Republicans’ criticism of the program comes as the GOP is pummeling the Obama administration for approving a $535 million stimulus-law loan guarantee to Solyndra, a California solar panel maker that declared bankruptcy in early September shortly after laying off 1,100 workers.

The committee is already making comparisons to Solyndra, blasting WAPA’s “risky, Solyndra-like loan authority.”

WAPA was given $3.25 billion in borrowing authority under the 2009 stimulus law to boost high-power lines, known as transmission lines, that carry electricity from one part of the country to another.

In October of 2009, WAPA reached an agreement to provide $161 million of financing to the 214-mile Montana Alberta Tie Line transmission project. The owner of the project has used about $152 million of that money, the IG report says.

The proposed project — a transmission line slated to carry electricity generated by wind farms from Montana to Alberta, Canada — is two years behind schedule and has gone $70 million over budget, the IG report says. The project was aquired by Canadian energy company Enbridge last month.

The IG report says WAPA did not conduct the necessary oversight to ensure that it protected its investments.

“Western had not implemented the necessary safeguards to ensure its commitment of funding was optimally protected,” the report says. “Western had not completed a formal root-cause analysis and corrective action plan designed to ensure more effective program safeguards are in place going forward.”

The report recommends that WAPA “formally evaluate” the problems posed by the Montana transmission project before moving forward with other projects.

The IG report comes about a month after Republicans on the Natural Resources Committee approved legislation, authored by McClintock, to eliminate WAPA’s borrowing authority.

“The troubling findings in the Inspector General’s Management Alert amplify the very serious, legitimate and imminent concerns that the WAPA program could lead to taxpayer defaults, an overall lack of transparency in decision-making, and potential raids on existing ratepayer-financed projects,” Hastings and McClintock write in the letter.

The lawmakers say they intend to send formal requests to DOE and WAPA for documents related to Montana transmission project.