Loan-Guarantee Winners Back Loans as Republicans Complain
John Woolard, chief executive officer of BrightSource Energy Inc., told lawmakers today that a $1.6 billion guarantee for a solar-generating facility in California will create 1,400 construction jobs at its peak. Without the backing, the company probably would have invested more overseas, he said.
Executives said the program encouraged investment, and that the projects were awarded after rigorous U.S. review.
Republicans led by Representative Jim Jordan of Ohio, chairman of the Oversight and Government Reform Committee stimulus oversight panel, said government shouldn’t pick “who wins and who loses.”
The program “wasted vast sums of money,” Jordan said today at a committee hearing.
The Obama administration’s energy programs are being investigated by House Republicans, who have focused on the collapse of Solyndra LLC about two years after winning a $535 million loan guarantee. Jordan’s panel has expanded the probe.
At today’s hearing, Republicans said e-mails from BrightSource in 2011 showed a cozy relationship with the White House, and suggested politics was behind the awards. In one e-mail, Woolard asked Jonathan Silver, then director of the loan program, to proofread a letter BrightSource Chairman John Bryson planned to send Bill Daley, White House chief of staff, asking for help with the Energy Department loan. Bryson is now Commerce secretary and Daley has left the White House.
Woolard said BrightSource “decided that it was not appropriate” to write Daley. In April, the department completed BrightSource’s loan guarantee, more than a year after it gave the company a conditional commitment.
Woolard said the company won its loan on the merits.
A Jan. 4, 2010, e-mail Woolard sent Matt Rogers, then senior adviser on the loan program, reported that Peter Darbee, then CEO at PG&E Corp. (PCG), had “talked directly to Obama about the program’s challenges.”
Woolard said he was referring to the time required for the Energy Department to review the loan applications, as Darbee tried to meet California state renewable-production mandates.
Executives from Abound Solar Inc., First Solar Inc. (FSLR) and Nevada Geothermal Power Inc. (NGLPF) testified in support of the loan guarantees and said their awards were based on the merits of their applications.
Some companies have struggled. First Solar, the world’s largest maker of thin-film solar panels, fell to a record low in Nasdaq Stock Market trading May 4 after reporting $401 million in restructuring costs tied to firing 30 percent of its workforce.
Abound, which won a $400 million loan guarantee, fired 180 employees in February. The company has drawn down about $70 million of its loan, CEO Craig Witsoe said.
Democrats said the loan program was helping U.S. companies compete in a global clean-energy market. Representative Dennis Kucinich, an Ohio Democrat, said losses in the program so far are less than expected by Congress.
“I’m left wondering why my Republican colleagues have devoted four hearings, including today’s, to criticize renewable energy companies which have received federal support as Congress intended, in a well-managed program that has returned better results than Congress even anticipated?” he said.
Gregory Kats, president of Capital-E, a Washington-based investment firm, said the Department of Energy program helps U.S. companies compete with rivals from nations that spend more to support clean energy.
“The largest risk is the DOE slows its loan guarantee program,” he said. He said the hearing served to undermine companies Congress should be trying to support.
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