Much of Obama clean energy aid to go unspent, negative publicity blamed

The Energy Department expects to spend only a portion of its remaining advanced energy loan guarantee authority and funds, in part because of negative publicity caused by the high-profile failures of some recipients, the Government Accountability Office reports.

Notably, a GAO director said in written testimony to two House Science Committee panels on Tuesday that the department had no expectation of backing any new projects under the Advanced Technology Vehicles Manufacturing loan program, which has $16.6 billion in unused authority and $4.4 billion in unused appropriations.

The ATVM program was seen as too difficult by applicants, GAO Natural Resources and Environment Director Frank Rusco said. The department has already put six applications totaling $1.48 billion into inactive status because of inadequate sponsor equity or technology problems.

“Most applicants and manufacturers we spoke with told us that, currently, the costs of participating in the program outweigh the benefits, citing challenges such as restrictive loan and reporting requirements and negative publicity surrounding DOE programs,” he said.

The program awarded six loans from 2009-2011, including nearly $5.9 billion to Ford and nearly $1.5 billion to Nissan for manufacturing facilities.

The program also awarded up to $529 million to electric car makers Fisker and $465 million to troubled Tesla, though that company was cut off at $193 million after failing to meet performance targets. A separate House subcommittee is planning a hearing next week into the company’s difficulties.

The unused authority and appropriations are part of a $51 billion pool across three programs that has $15.1 billion in pending applications, with most sought by the nuclear power and fossil fuel industry.

Applications from renewable energy and energy efficiency projects amount to slightly more than $2 billion.

Nuclear power accounts for more than $10.3 billion: $8.3 billion sought by Southern Company for its Vogtle nuclear plant expansion in Georgia and $2 billion for  Areva’s planned uranium enrichment plant in Idaho Falls, Idaho.

One coal gasification project with carbon capture is seeking a $2.8 billion guarantee.

Rusco appeared at the hearing by the committee’s oversight and energy panels to speak about GA’Os reports last month on the status of the loan guarantee program and on duplication in federal wind energy supports.

Rob Gramlich, interim CEO of the American Wind Energy Association, said that of 82 federal initiatives that GAO said supported wind energy, only two have accounted for the bulk of aid given to wind projects.

One of them, the Treasury Department’s grants in lieu of tax credits Sec. 1603 program, is no longer available to new wind projects. The other is the Production Tax Credit that Congress agreed to extend for projects that being construction by the end of this year.

Rep. Cynthia Lummis, R-Wyo., who chairs the Energy Subcommittee, said the wind industry should be able to succeed without federal tax credits and cash programs.

The ranking Democrat on the panel, Rep. Eric Swalwell of California, said GAO’s determination of duplicative programs was misleading and that different programs have addressed different needs for wind energy projects.


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