July 12 (Bloomberg) -- A House bill introduced by Republicans in response to Solyndra LLC’s collapse may keep the U.S. from backing the latest clean-energy projects under its remaining $34 billion in loan authority, the Energy Department said.
The bill, a response to an 18-month investigation into Solyndra’s $535 million U.S. loan guarantee, would bar the Energy Department from issuing loan backing for future projects.
That could keep the U.S. from supporting the most promising proposals, David Frantz, the acting director of the department’s loan-guarantee program, said today at a House energy committee hearing on the measure, which Republicans are calling the “No More Solyndras” bill.
“We feel it would preclude us from proceeding on new and innovative technology,” Frantz said.
He also objected to a provision in the legislation prohibiting taxpayers from taking a back seat to private investors in case of liquidation, which occurred when the Energy Department made a last-minute effort to save Solyndra.
The prohibition could weaken the Energy Department’s ability to save a project, Frantz said.
Republicans led by Representative Cliff Stearns of Florida, chairman of the House Energy and Commerce Committee’s oversight panel, said the bill was designed to fix problems in the loan-guarantee program uncovered during the investigation into Solyndra. The solar company failed two years after it received its guarantee.
The department rushed to approve backing for Solyndra’s loan despite “red flags” about the company and failed to monitor the loan as the firm spiraled toward bankruptcy, Republicans said.
“There’s more than enough evidence to declare this program a failure,” Representative Ed Whitfield, a Kentucky Republican and chairman of the energy committee’s energy and power panel, said during the hearing.
Representative Diana DeGette, a Colorado Democrat, said the Republican-led investigation was motivated by a desire to make “cheap political points in an election year.”
Not all Republicans think the program should be ended.
“I do think we can reform the program” without terminating it, said Texas Republican Representative Joe Barton.
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