Renewable energy loan guarantees questioned as deadline approaches

The U.S. Department of Energy (DOE) is preparing to award $9 billion in loan guarantees to 14 renewable energy projects amid concerns over the department’s handling of a controversial loan guarantee to now-bankrupt solar manufacturer Solyndra.

The loan guarantees must be finalized before the program ends Sept. 30. Of the $18 billion made available in February 2009, the Obama Administration has awarded more than half. DOE has 14 more conditional commitments outstanding under Section 1705, totaling $8.89 billion. Ten of those commitments, totaling $8.029 billion, were issued in June of this year or later.

However, the House Energy and Commerce Committee sent a letter September 20 to Energy Secretary Steven Chu requesting financial details of the remaining loan guarantees. This comes after Solyndra announced in August it was filing for bankruptcy after it was awarded a $535 million loan guarantee in 2009.

“With so much of DOE’s Section 1705 Loan Guarantee portfolio not yet finalized, and the September 30, 2011 stimulus deadline to close these guarantees just days away, we are concerned that another rush to meet stimulus deadlines will result in DOE closing these deals before they are ready,” the letter said.

Committee members asked DOE three questions, including if the department plans to close on each of the 10 conditional loan guarantees before the September 30 deadline, does DOE have authority to ask for additional time to conduct due diligence and what will be the result if DOE does not finalize the conditional commitments before the end of the month.

The letter also stated that committee members want a briefing by September 26 of the financial condition of previously finalized loan guarantees and 14 conditional loan guarantees.

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