Monday, September 26, 2011

$624 Million In New Loan Guarantees In Wake Of Solyndra Scandal

Sep 23: Amidst the highly charged political controversy over the Solyndra bankruptcy and its $535 million loan guarantee [See WIMS 9/14/11], U.S. Department of Energy (DOE) Secretary Steven Chu announced three new loan guarantees to support alternative energy projects. The projects in Iowa, Nevada and New Hampshire total nearly $624 million.
    DOE finalized a $105 million loan guarantee to support the development of one of the nation's first commercial-scale cellulosic ethanol plants. Project LIBERTY, sponsored by POET, will be built in Emmetsburg, Iowa and is expected to produce up to 25 million gallons of ethanol per year. POET estimates the project will fund approximately 200 construction jobs and 40 permanent jobs. It is expected to generate around $14 million in new revenue to area farmers who will provide the corn crop residue. Chu said, "This project represents a pioneering effort to make broad scale deployment of cellulose ethanol a reality. Producing the next generation of biofuels can not only reduce America's oil dependency, it can also create vast new economic opportunities for rural Americans."
     DOE also finalized a partial guarantee for up to a $350 million loan to support a geothermal power generation project sponsored by Ormat Nevada, Inc., which is expected to produce up to 113 megawatts (MW) of clean, baseload power from three geothermal power facilities and will increase geothermal power production in Nevada by nearly 25 percent. The facilities are Jersey Valley in Pershing County, McGinness Hills in Lander County and Tuscarora in Elko County. The company estimates the project will fund 332 jobs during construction and 64 during operations. Chu said, "We are investing in geothermal projects that will further develop the nation's clean energy resources, create skilled jobs for American workers and ensure the U.S. remains a global leader in geothermal energy development. The project announced today will produce virtually no greenhouse gas emissions and will create hundreds of new jobs in Nevada."
    DOE also finalized a partial guarantee for $168.9 million loan to Granite Reliable Power, LLC. The loan guarantee will support a 99 megawatt (MW) wind generation project that will be New Hampshire's largest wind farm. The project will be located in Coos County in northern New Hampshire, approximately 110 miles north of Concord and will consist of 33 Vestas V90 3.0-MW wind turbines. Project sponsors, BAIF Granite Holdings, LLC and Freshet Wind Energy, LLC, expect the project will fund nearly 200 construction jobs. Chu said, "Today's investment brings new jobs to New Hampshire and supports the commercial-scale deployment of clean energy technologies in the U.S. America's wind energy resources are abundant, clean and mostly untapped. Continued investments in this source of emissions-free energy will strengthen the economy, create good American jobs and help the nation compete with other countries that are quickly scaling up wind power generation." 
    The day before as the Department approved the three new loans, Senator Lisa Murkowski (R-AK), Ranking Member of the Senate Energy and Natural Resources Committee sent a letter to Chu urging him to correct any shortcomings in DOE's loan guarantee program under the 2009 stimulus bill before taxpayers are asked to shoulder additional risk. She indicated that DOE may issue up to $9.2 billion in new loan guarantees under the temporary Section 1705 loan guarantee program in the next week (i.e. before the end of the 2011 Fiscal Year, before October 1). Murkowski wrote, "In these critical days, as the cabinet officer responsible for approving obligations entered into with respect to these transactions, I ask you to do your utmost to avoid the mistakes that appear to have been committed with respect to Solyndra LLC, the first-ever recipient of a DOE loan guarantee. Although I believe there is value in DOE's loan program, the circumstances surrounding Solyndra's bankruptcy filing have raised questions about the program as a whole."
    On the same day as the Department approved the loans, the two top executives for now-bankrupt Solyndra solar project in California, invoked their Fifth Amendment rights against self-incrimination and refused to answer any questions from the House Energy and Commerce Committee, Subcommittee on Oversight and Investigations. Despite earlier pledges that they would voluntarily testify, Solyndra CEO Brian Harrison and CFO W.G. Stover both pleaded the Fifth Amendment and declined to answer any of the Subcommittee's questions. Full Committee Chairman Fred Upton (R-MI) addressed Harrison and Stover at the hearing and said, "It is a very sad commentary that we met resistance every step of the way of seeking answers to basic questions overseeing the 'approval process' of this project. We had to finally resort to a subpoena and now the outright resistance of getting answers that both of you assured us, only last week, that you'd provide. Let me just warn you and the other folks involved in this taxpayer rip-off. We're not done. No we're not."
    Meanwhile, Representative Ed Markey (D-MA), Ranking Member of the Natural Resources Committee and a senior member of the Energy and Commerce Committee, called on Chairmen Fred Upton and Cliff Stearns (R-FL) "to hold hearings on the implementation of the nuclear power plant loan guarantee program, the issuance of the conditional nuclear loan guarantee that has been awarded, and the role the nuclear industry has had in altering the terms associated with subordination." He pointed out that DOE has awarded an $8.3 billion conditional loan guarantee to Georgia Power Company to build 2 new nuclear reactors. Rep. Markey said, "There are many legitimate public policy considerations that Congress should explore regarding the full suite of the Department's loan guarantee programs. We should subject the nuclear loan guarantee program to the same level of rigorous scrutiny as we are now insisting the solar loan guarantee program undergo."  
    Access a DOE release on Project LIBERTY (click here). Access the POET website for more information (click here). Access a DOE release on Ormat Nevada projects (click here). Access the Ormat website for more information (click here). Access a DOE release on Granite wind project (click here). Access the Granite Reliable Power, LLC website for more information (click here). Access the release and letter from Senator Murkowski (click here). Access the release from Rep. Upton (click here). Access the release and letter from Rep. Markey (click here). [#Energy/Green, #Energy/Nuclear]
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