By Ben Geman - 07/12/12 12:34 PM EDT
The Energy Department (DOE) is trying to counter fresh GOP legislative and political attacks against the department’s embattled loan guarantee program.
A senior DOE official will tell lawmakers Thursday that House GOP legislation called the "No More Solyndras Act" would harm the program without boosting taxpayer protections. The legislation would create new restrictions on clean energy loan guarantees.
David Frantz, the acting head of the loan programs office, says in testimony to the House Energy and Commerce Committee that DOE has already made a series of improvements to the program.
“This effort has included improvements to the way loan guarantees are originated and the way in which they are monitored. With these improvements in place, the department has concerns that the legislation would not result in increased taxpayer protections, but would instead hinder effective implementation of this important program,” he states in written testimony submitted for a Thursday hearing.
The loan program is under fire from Republicans over the collapse of the solar panel manufacturer Solyndra, as well as the more recent bankruptcy of Abound Solar and headwinds facing other DOE-backed companies. GOP lawmakers say they represent recklessness with taxpayer dollars and the failure of the White House green energy agenda.
Top Energy and Commerce Committee Republicans floated a draft bill this week that would sunset the loan guarantee program, barring any new guarantees for applications received after the end of 2011.
The "No More Solyndras Act," which is the subject of Thursday's hearing, also creates new parameters for the review of current applications. More on that here.
The measure is named after the California company that went belly-up last year after winning a $535 million loan guarantee in 2009.
Obama administration officials have counterpunched amid the GOP attacks, arguing that the woes of a few companies should not obscure the success of the wider loan portfolio.
“The troubles of some segments in the solar manufacturing market should not overshadow the great work that the department’s loan programs have done to date, or the need to continue to find ways to support clean energy deployment in this country,” Frantz states.
The bill also prevents the “subordination” of taxpayer interests to private investors.
Republicans have slammed the early 2011 decision to restructure the Solyndra loan that put private investors — who were providing additional capital to the struggling firm — ahead of taxpayers for repayment if the company collapsed.
But Frantz, during the hearing, said it's important to keep the ability to subordinate as a last-ditch tool rescue a highly distressed loan recipient.
“This tool would only be used in extreme situations,” he said.
“You would be hamstringing us and taking a very critical tool that could, in fact, save taxpayers’ money,” Frantz said of the GOP bill to bar subordination.
The loan program was first authorized in a bipartisan 2005 energy law, and expanded in the 2009 stimulus, which ultimately provided backing for Solyndra and other solar equipment manufacturing, as well as wind, solar and geothermal power-generation projects.
The overall program is authorized to support technologies including renewables, nuclear power, transmission and low-emissions fossil energy such as carbon control technologies projects for coal-fired power.
In addition to the renewables guarantees, other projects approved or conditionally approved include a preliminary commitment for an $8.3 billion guarantee to help utility giant Southern Co. build a pair of nuclear reactors in Georgia.
Loan program officials are currently “performing due diligence on several advanced fossil projects,” according to Frantz.
—This post was updated at 10:53 a.m.