'No More Solyndras Act' advances, as sticks and stones are aimed at DOE loans02. August 2012 | Markets & Trends, Global PV markets | By: Cheryl Kaften
Led by Chairman Fred Upton (R–Michigan), on August 1, the U.S. House Committee on Energy and Commerce effectively voted "aye" on Department of Energy (DOE) loan guarantees for nuclear and fossil fuel programs, but "nay" to further support for solar and wind energy.
After hours of debate, the committee advanced a bill – astutely called the "No More Solyndras Act," to appeal to American voters during a presidential election year – that Republican members promised would "phase out the Department of Energy’s mismanaged loan guarantee program and provide taxpayers [with] strong new protections." Republicans won the day with a 27–19 vote along party lines. The legislation now moves to the House floor for consideration.
"If cynicism were an Olympic sport, Republicans would win the gold today for their legislative back flips," said Rep. Ed Markey (D-Massachusetts), who introduced several amendments to the bill, only to see them go down in defeat. "Democrats oppose terminating the loan guarantee program, and despite Republican rhetoric [that this legislation will ultimately sunset the program entirely], we've known all along that they've opposed terminating it in order to protect the US$32.5 billion for nuclear and fossil loan guarantees."
The current wording of the legislation would prohibit the DOE from issuing any loan guarantees to new applicants, but would allow requests submitted before December 31, 2011, to remain in the queue for consideration. Indeed, under the bill, the DOE retains the authority to issue $34 billion worth of loan guarantees – more than half of that amount for nuclear loan guarantees that remain eligible.
Markey recently pointed out, "Nothing in the 'No More Solyndras Act' would preclude the DOE from awarding any of these pending applications. In fact, the … act is so broadly drafted that even those applications received by December 31, 2011, that have not entered due diligence – but also have not been rejected or withdrawn – would still be eligible to receive loan guarantees in the future."
He and his Democratic colleagues on the committee said that, although the "No More Solyndras Act" would require the Department of the Treasury to provide written feedback on all outstanding applications prior to the issuance of a DOE loan guarantee, it does not mandate that DOE actually follow the guidance provided. Therefore, even those loans on the list that were not actually qualified could legally be funded.
In an attempt to head off such approvals, in a surprise move on Wednesday, the Democrats proposed to eliminate the program in its entirety – immediately – and then claimed vindication when the Republicans balked. The bipartisan vote came in at 3–39, with almost every committee member in favor of continuing the program.
"We've called the Republican's bluff today, and they are now on the record in their opposition to ending the loan guarantee program, despite their statements to the contrary," crowed Markey.
Ranking Member Henry A. Waxman (D-California) stated, "The Republicans have spent the last year and a half making wild accusations. Their investigation of the loan guarantee program turned up no wrongdoing, but that didn’t stop their rhetoric from getting more and more extreme. Today’s vote reveals the truth. The Republican rhetoric does not match reality. Most members of Congress simply do not want to terminate the loan guarantee program."
On the Republican side of the aisle, Upton took full advantage of his bully pulpit. He said the legislation "recognizes both our current fiscal challenges and our understanding that the federal government is ill-suited to be gambling the taxpayers’ dollars with this sort of company-specific investment."
Pointing to the political scapegoat for which the bill is named, Subcommittee Chairman Cliff Stearns (R-Florida) said, "Our national debt is approaching $16 trillion, and yet, President Obama wants to continue committing taxpayer dollars to a risky 'green' jobs scheme. Solyndra, which cost taxpayers $535 million, is only the first company backed by the White House to go bankrupt in this program, and the ‘No More Solyndras Act’ will protect the American people from further losses."
Among the amendments suggested by the Democrats which fell by the wayside during the markup process, as well as during the full-committee review session, were the following:
- From Rep. Bobby Rush (D-Illinois): An amendment to promote clean coal technology;
- From Rep. Gene Green (D-Texas): An amendment to place a one-year moratorium on the DOE loan guarantee program and evaluate it further;
- From Rep. Waxman: An amendment that would allow loan guarantees for deserving applications received after December 31, 2011;
- From Rep. Markey: An amendment to eliminate companies from consideration that have received a letter from a stock exchange warning that they will be de-listed because they are trading at too low a price (and are, therefore, in a "death spiral," making them ineligible for a loan);
- From Rep. Markey: An amendment to eliminate companies from consideration that—like the unfortunate Solyndra – already are over $535 million in debt (for example, the United States Enrichment Corporation, which lost $540 million last year and has lost over $100 million this year); and
- From Rep. Markey: An amendment that called for domestic content, mandating that at least 75 percent of the material used in the manufacturing of products supported by a DOE loan guarantee must be manufactured by a U.S. firm on U.S. soil.
After his amendment was struck down, Waxman said the cutoff date of December 31, 2011, was calculated to prevent the Energy Department from leaving the door open to future applications for projects using breakthrough energy technologies, including coal-based and nuclear projects. "Under this bill, new breakthrough technologies need not apply, even the technologies that Republicans claim to support," said Waxman.
Rep. Rush backed him up. "The bill before us arbitrarily seeks winners and losers. No matter how ground-breaking or promising any new applications may be, they can’t be considered at all. … We are closing the door on innovation. This country has moved forward based on its capacity to innovate. The whole world is looking toward America to be the kind of innovating champion it always has been, but this committee is ready to cede energy advancements to China, Germany, and other nations."
By contrast, several Republican amendments were approved and adopted before the bill was "advanced favorably" to the floor. The committee approved the legislation after adopting amendments from Reps. Mike Pompeo (R-Kansas) and Tim Murphy (R-Pennsylvania) requiring the Government Accounting Office to complete a study of U.S. and foreign subsidies in energy markets. The committee also adopted an amendment offered by Stearns to reaffirm the prohibition of subordination and an amendment from Rep. Michael C. Burgess (R-TX) to increase penalties for senior federal employees and federal appointees who violate any requirements of the loan guarantee program. To view these amendments, click here.
Stearns has previously remarked that he is 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," he said in a formal statement.
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