Feinstein says GOP bill would halt energy projects
Dozens of renewable energy projects around the country, mostly in the West, would be unable to get off the ground if House Republicans are successful in scaling back a program that helps companies obtain financing for solar, wind and geothermal plants, critics of the proposal said.
California Sen. Dianne Feinstein told colleagues in a letter released Wednesday that the changes sought would essentially prevent the Department of Energy from finalizing all of the renewable energy applications under review for loan guarantees. The guarantees act as a promise by the government to back a loan if the company can't make good on it and can also help the company obtain federal financing.
The Democratic lawmaker estimated that at least 31 projects around the country would likely be scuttled if the legislation became law.
"The firms have lined up $9 billion in equity investment from the private sector and have spent hundreds of millions of dollars to date on application fees and project development," Feinstein said. "Much of that would be lost."
While the GOP effort would save more than $1.4 billion, that money had the potential to finance more than $36 billion worth of energy projects, her staff said.
The House is considering legislation to fund the federal government through Sept. 30. As part of their budget proposal, GOP lawmakers want to cut the loan-guarantee program mostly by rescinding unspent stimulus dollars.
The legislation could have a difficult time in the Senate, where several powerful lawmakers, including Senate Majority Leader Harry Reid, are big proponents of solar power development.
A trade group representing solar energy producers told House Speaker John Boehner in a letter that the legislation "would likely kill all clean energy projects with pending DOE loan guarantee applications, causing the loss of tens of thousands of jobs and many other benefits," said Rhone Resch, president and CEO of the Solar Energy Industries Association.
Boehner's office did not respond immediately to a request for comment.
California has dozens of projects in the pipeline that are eligible to get loan guarantees, while Arizona and Nevada also have a large stake in the program.
Michael Whalen, chief financial officer for SolarReserve, a California-based company, said the loan guarantees will be essential for his company to obtain financing for the construction of two solar energy plants - one in Riverside County California and the other in Nye County, Nev.
The two projects each would entail about 670 jobs during construction and 40 to 50 workers for operating the plants. The company projects that the Nevada plant would power up to 75,000 homes in peak electricity periods and the California plant would power up to 68,000 homes.
"This is just now the point in which the Department of Energy program is really beginning to bear fruit," Whalen said. "At this late stage to say, 'we're not interested in doing this anymore' would be devastating."
Congress created the loan guarantee program in 2005. Industry officials have frequently complained that the loan guarantee process has been excruciatingly slow. Federal auditors also found last year that the Department of Energy was not treating all applicants consistently.