In what has become a familiar exchange over the proposed Nantucket Sound wind farm, federal lawmakers from outside of Massachusetts are once again pressuring President Barack Obama’s administration for information on his support for the project.
U.S. Reps. Paul Broun, R-Ga., and James Lankford, R-Okla., sent a letter Thursday to outgoing Department of Energy Secretary Steven Chu, reiterating demands they first made in January for agency documents related to Cape Wind, a list of all pending applications for two DOE loan programs, and a briefing about their concerns.
Broun is chairman of the subcommittee on oversight for the House Committee on Science, Space and Technology. Lankford is chairman of the subcommittee on energy policy, health care and entitlements for the Committee on Oversight and Government Reform.
The two are questioning whether the DOE should have adopted the environmental review of Cape Wind already approved by the Department of the Interior. DOE approval is required before the department can OK a loan for Cape Wind.
“On Jan. 25, 2013, we wrote to you regarding DOE’s efforts to adopt an Environmental Impact Statement (EIS) for the Cape Wind project despite concerns relating to the development of the EIS, numerous lawsuits associated with the project, and considerable controversy regarding the program as a whole,” the legislators wrote to Chu.
In their first letter, the legislators attempted to connect the potential Cape Wind loan to the bankruptcies of other recipients of DOE loans, including solar energy giant Solyndra, which failed two years ago after receiving $535 million in loans from the agency. They also highlighted a list of legal challenges Cape Wind still faces.
“Given the circumstances surrounding DOE management of loan guarantees, as well as the Cape Wind project itself, we question the wisdom of moving forward with this loan guarantee prior to further consideration and resolution of the associated issues and lawsuits,” they wrote.
The DOE conducted a thorough and independent review of the environmental impact statement and other environmental assessments of Cape Wind issued by the Interior Department, David Frantz, the energy agency’s acting executive director of the loan programs office, wrote in a response Thursday to Broun and Lankford.
The agency will consider any new information before deciding whether to approve a loan for Cape Wind, Frantz wrote. The department has made no decision on whether to issue a conditional commitment or loan guarantee for the Cape Wind project, he wrote.
The Government Accountability Office found that private-sector lenders report that the DOE’s due diligence in reviewing applications for loan guarantees is “as rigorous as, or more rigorous than, underwriting and due diligence standards in the private sector,” Frantz wrote.
Cape Wind will need several types of funding for the approximately $2.6 billion project.
Two weeks ago, Cape Wind president Jim Gordon announced plans to tap Bank of Tokyo-Mitsubishi UFJ as the lead bank in securing debt for the project.
The Japanese bank is expected to coordinate $1.8 billion to $2 billion in debt financing for the project, leaving an additional $600 million that must be raised in equity or from other sources.
Siemens Energy Inc., which is expected to build the wind farm’s 130 turbines, may also provide $100 million for Cape Wind, according to officials with both companies.
Cape Wind’s application for a roughly $2 billion DOE loan was put on hold in 2011. It has now been pared down to about $350 million, according to a source with knowledge of the request.
Broun and Lankford are not the first federal lawmakers to question the Obama administration’s support for Cape Wind.
In a letter sent to Obama in August, U.S. Rep. Darrell Issa, R-Calif., chairman of the House Committee on Oversight and Government Reform, requested additional documents related to the DOE loan program and tied perceived pressure to approve a loan for Cape Wind to other decisions by loan program administrators that he said contradicted advice from top economic advisers.
In response to Broun and Lankford’s latest letter, U.S. Rep. William Keating, D-Mass., pointed out that the DOE has already adopted the environmental impact statement on Cape Wind.
“The letter is just another example of the obstructionist tactics we have seen with projects across the country,” he said. “This project will bring jobs and revenue to our area and is too important to be the subject of political games.”
Cape Wind spokesman Mark Rodgers also questioned the letter’s political motives.
“I think it’s important to take the politics out of this and remember this program was set up on a bipartisan basis with Republicans and Democrats in Congress and a Republican White House eight years ago,” he said.
The program identified innovative energy projects that would reduce greenhouse gas emissions and would help stimulate the creation of new industries in the United States, he said.
“Cape Wind is a project that has all the qualities I just mentioned and is under review by DOE staff,” he said.
Comparing Cape Wind, which has contracted buyers for more than three-quarters of its electricity, to Solyndra, which was competing on a global market with an uncertain business plan, is “nonsensical,” Rodgers said.
“I would further note that the congressman from Georgia was very enthusiastic about the expansion of the Vogtle nuclear power plant in his state that will receive $8 billion in assistance from this very same loan program, and he has no objections to that,” Rodgers said about Broun.
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