Before Solyndra, Congress Thought Energy Loan Program Was Too Slow 10/03 02:39 PM WASHINGTON (Dow Jones)--Senate Majority Leader Harry Reid wrote to President Barack Obama last year, complaining that a loan program for solar and other energy projects was unnecessarily burdensome and slow, a letter reflecting bipartisan concerns the government wasn't moving fast enough on a program designed to spur job growth.
"Unfortunately, despite my repeated efforts to encourage the Administration to fully and immediately implement this program, the OMB has imposed unnecessary and bureaucratic hurdles that have stalled progress," Reid (D., Nev.) wrote in a letter to Obama in August of last year.
Reid is one of more than a dozen lawmakers from both parties who have criticized the pace of loan-guarantee programs under the Department of Energy designed to expand solar energy and other clean-energy production and create jobs.
Concerns about the pace of guaranteeing loans have turned on their head after the saga of Solyndra LLC, a solar-panel maker that was the first company to receive a loan under the Department of Energy's loan guarantee program. The company filed for bankruptcy earlier this month.
Lawmakers in recent weeks have focused on whether the department rushed Solyndra or was rushing to finalize deals before Friday, when its stimulus funds expired.
"Now that Solyndra has declared bankruptcy, we cannot help but wonder whether additional time to review this guarantee might have prevented the taxpayers from being on the hook," Rep. Fred Upton (R., Mich.) and other Republicans on the House Energy and Commerce Committee wrote to Energy Secretary Steven Chu on Sept. 20.
"We are concerned that another rush to meet stimulus deadlines will result in DOE closing these deals before they are ready." The department closed loan guarantees for about $4.7 billion worth of deals on Friday alone, bringing the total to about $7.9 billion in September, more than all the prior months of 2011 combined.
Despite Solyndra's troubles, the driving concern from companies vying for loan guarantees and Congress has been the government was taking too long and hampering job growth.
"Billions of dollars for solar and other important clean energy projects are awaiting administration approval, meaning thousands of new, desperately needed jobs hang in the balance," Reid said in the letter, which was obtained from OMB under a Freedom of Information Act request.
Adam Jentleson, a spokesman for Reid, said the majority leader's goal was to make the government work faster and more effectively to help the private sector create jobs.
Kevin Smith, chief executive of SolarReserve LLC, which recently closed a solar power plant loan guarantee with DOE, said the review process was "pretty excruciating."
"It's taken two years to get through the process so we are pretty pleased that the project has completed," Smith said. "The level of due diligence here has far, far exceeded that on the commercial side."
Republicans, too, have written to the administration with concerns about the pace of the DOE loan program.
"I am writing to you today to stress the urgency of expeditiously reviewing loan guarantee applications for renewable energy projects, particularly those utilizing solar technology," said Rep. Mary Bono Mack (R., Calif.) in a letter from September 2010 to Chu, White House budget director Jack Lew and Treasury Secretary Timothy Geithner. The letter was obtained from OMB under a Freedom of Information Act.
Bono Mack mentions in her letter how Solar Trust of America is planning two utility-scale solar projects in her district that could create thousands of skilled jobs.
A spokesman for Bono Mack, Ken Johnson, said in an e-mail that the letter was intended to get a yes-or-no answer for companies in her district that were trying to find out if they should look elsewhere for financing. Bono Mack's district is home to several solar companies.
Republicans have accused the administration of rushing to guarantee Solyndra's loan in 2009 for political reasons, though the White House said politics didn't play a role. Internal e-mails released by House Republicans, however, show that some staff at OMB, which was charged with determining the long-term costs of the loans to companies, were concerned that the Solyndra review process was being rushed.
OMB said the letters from lawmakers about the slowness of approving loans didn't influence the agency's decisions. Moira Mack, a spokeswoman for OMB, said the agency has had "ample time" to review each project. She said the administration has improved the loan program by streamlining the application process.
Sen. Jeff Bingaman (D., N.M.), who also wrote to the administration with concerns about the program, said in a statement, "We have wasted valuable time waiting for this loan guarantee initiative to get off the ground, and that is why so many of us in Congress - both Democrats and Republicans - have been urging DOE and OMB for years to get moving."
Concerns about the administration moving too quickly on the loan program began surfacing earlier this month, as Solyndra shuttered its offices, filed for bankruptcy and had its headquarters searched by the Federal Bureau of Investigation.
But after closing the Solyndra deal, the Department of Energy didn't complete another loan guarantee for 10 months. It revamped its loan office under a former venture capital fund manager, Jonathan Silver, who took over the program in November 2009. As of July, the office had 175 employees and contractors, compared to 15 in January 2009.
The pace of closings has picked up under Silver, but even now "it's going to take longer to close a government financing" than a typical private sector deal, said Adam Umanoff, a California attorney who has worked on several loan guarantee deals.
-By Jared A. Favole, Dow Jones Newswires; 202-862-9256; jared.favole@ dowjones.com |
