House Republicans floated legislation Tuesday that would sunset the Energy Department’s controversial loan guarantee program for green energy projects.
The draft bill, which Republicans call the “No More Solyndras Act,” would bar the Energy Department (DOE) from granting loan guarantees for any applications received after the end of 2011.
For existing applications, the bill – which is named after the failed DOE-backed solar firm Solyndra – sets new parameters for reviewing the requests. The department currently has authority to issue $34 billion worth of loan guarantees, according to the draft bill.
House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) and Rep. Cliff Stearns (R-Fla.), Upton’s point man on the committee’s Solyndra probe, are the sponsors of the draft bill that will be the subject of a committee hearing Thursday.
Stearns said Monday evening that he’s hoping for a floor vote before the congressional August recess. “Our ‘No More Solyndras Act’ will ensure taxpayers are no longer vulnerable to the Obama administration’s game of crony capitalism,” Stearns said in a statement Tuesday.
But the plan could run into conflict with lawmakers who say the loan program should be altered, not scrapped. Alaska Sen. Lisa Murkowski, the top Republican on the Senate Energy and Natural Resources Committee, has taken a mend-it-don’t-end-it approach.
Republicans have pounced on the 2011 collapse of Solyndra, which had received a $535 million loan guarantee in 2009, as well as the more recent bankruptcy of Abound Solar and headwinds facing other DOE-backed companies, alleging they represent the failure of the White House green energy agenda.
But administration officials have pushed back against the attacks, arguing they obscure the successes of the loan guarantee program, which was first authorized in a bipartisan 2005 energy law and expanded through a stimulus law program that ultimately backed Solyndra and other companies.
In addition to sun-setting the program, the bill would set new restrictions on review of existing loan guarantee applications that are meant to correct what Republicans call deep flaws in DOE’s vetting process.
A White House-commissioned report released earlier this year also recommended improvements to the program.
The bill would require that no guarantees may be made until the Treasury Department reviews them and makes a recommendation to the Energy Department, and states that if DOE makes a guarantee that’s not consistent with Treasury’s recommendation, DOE officials must provide a report to Congress explaining why.
It also requires DOE to consult with Treasury on the restructuring of any loan guarantees, and prevents the “subordination” of taxpayer interests to private investors.
Republicans have slammed the early 2011 decision to restructure the Solyndra loan that put private investors – who were providing additional capital to the struggling firm – ahead of taxpayers for repayment after the company collapsed.
The Energy Department did not provide immediate comment.
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