WASHINGTON — One federal-loan program for green energy asks applicants to wade through so much paperwork the Energy Department has not made a loan in more than three years. A second program does not evaluate if its loans for renewable or innovative energy technologies are effective.
The conclusions were drawn from a new report by an independent federal agency, which suggested that Congress save $4.2 billion by halting future payments to the Advanced Technology Vehicles Manufacturing loan program.
Frank Rusco, director of natural resources and environment for the Government Accountability Office, appeared on Capitol Hill Friday to take questions from lawmakers about the findings of the 11-page report. “The requirements and the length of the time to get through the process is just not worth it,” Rusco told members of an investigations and oversight subcommittee of the House Committee on Energy and Commerce.
“I know DOE wants to rejuvenate the program, but there isn’t a lot of interest. There’s only one active loan.”
Rusco’s grim conclusion about the hurdles for applicants had support from at least one Democrat on the panel.
“An inordinate amount of paperwork” were the words Rep. Bruce Braley of Iowa, a Senate candidate, used to describe a nearly-decade old renewable energy loan program.
Peter W. Davidson, the executive director of the loan programs office for the Department of Energy, told Braley the department was working to “staff up” or hire more workers to address the problem.
Two years ago, the House Committee on Energy and Commerce held high-profile hearings into the failures of two recipients of the federal loans, Solyndra of California and Abound Solar of Colorado. Each troubled solar energy firm had gotten a loan through the DOE’s Section 1705 program, which the 2009 stimulus bill funded through September 2011.
Section 1703 program is a related program that began in 2006. It and the vehicle-manufacturing program were the stated focus of the hearing Friday. The Energy Department guaranteed two loans under the 1703 program for $6.2 billion, according to the GAO report.
Yet lawmakers had half an eye on the battle from two years ago.
Rep. Diana DeGette, a Colorado Democrat, defended the department’s $536 million loan to Solyndra despite that Rusco, the previous speaker, had not mentioned the failed energy-solar maker. “We never heard any evidence of wrongdoing. It was clear the decisions were made on the merits,” DeGette said.
Rep. Cory Gardner, a Colorado Republican and Senate candidate, referred to the failure of Abound Solar. “Some DOE loan programs have been very successful, but the question is, why hasn’t the DOE cleaned up the Abound Solar mess?,” Gardner told TCO after the hearing.
With another eye, lawmakers debated the efficacy of the 1705 and the vehicle-manufacturing program.
Supporters noted that the car-loan program had helped Tesla emerge as a giant in electric-car business. “It created thousands of jobs in California and elsewhere,” Rep. Paul Tonko, a New York Democrat, said.
Opponents suggested that history could repeat itself and taxpayers could foot the bill for loan guarantees to companies that go belly up.
Rep. Greg Harper, a Mississippi Republican, asked Rusco to repeat a figure from his report that $28 billion in loans are available to companies.
The GAO report cast a skeptical gaze at part of the $28 billion. It noted that the DOE had only one active application for the vehicle-manufacturing loan and the department had not handed out a grant since March 2011. “(U)nless DOE can demonstrate a demand for new ATVM loans and viable applications, Congress may wish to consider rescinding all or part of the $4.2 billion in credit subsidy appropriations,” the report concluded.