DOE’s Inspector General Critical of Clean Energy Loan Guarantee Program Recordkeeping
An audit of the Department of Energy’s (DOE’s) loan guarantee program for clean energy technologies completed last week by the agency’s inspector general found that the program could not always “readily demonstrate, through systematically organized records, including contemporaneous notes, how it resolved or mitigated relevant risks prior to granting loan guarantees.”
Inspector General Gregory H. Friedman cited two specific complaints: One was that decision documents “did not always describe actions” officials said they took to mitigate or resolve loan risks; and the other, that documentation wasn’t kept well.
“Of the 18 projects with loan guarantees or conditional commitments, there was no information archived in the electronic system for 3 of the projects,” Friedman wrote. “The system included only limited data for 12 additional projects. Documentation for the remaining three projects was more robust, but did not include all of the information necessary to describe the actions taken to evaluate the applicant’s credit worthiness and/or the risks associated with the projects.”
Loan guarantees have been under scrutiny in Congress by Republicans such as House Energy and Commerce Committee Chairman Fred Upton (R-Mich.), who is calling for an investigation into the half-billion-dollar loan to solar company Solyndra by the DOE. In a letter to Energy Secretary Steven Chu, Upton says that the DOE’s “stimulus loan guarantee program highlights many of the systemic flaws associated with the stimulus. … In the mad dash to spend hundreds of billions of dollars, projects were rushed and the highly touted benefits from ribbon cuttings were not realized."
As of December 2010, the DOE’s clean energy loan guarantee program had guaranteed loans valued at over $3.9 billion to eight recipients and had conditional commitments for an additional $12 billion in loan guarantees.
Last week, the DOE offered a conditional commitment to Record Hill Wind LLC for a $102 million loan guarantee. The loan guarantee will support the Record Hill wind project, which includes a 50.6-MW wind power plant and an 8-mile transmission line and associated interconnection equipment near the town of Roxbury, Maine.
Developed and managed by Wagner Wind Energy of New Hampshire and Independence Wind of Maine, Record Hill is sponsored by the Yale University Endowment fund.
The wind facility will consist of 22 2.3-MW SWT-2.3-93 turbines and new transmission lines to interconnect with Central Maine Power, the local utility. The turbines will be installed with innovative turbine load control (TLC) technology, a system of sensors and processing software that allows the turbines to continue to generate electricity under turbulent conditions, rather than be shut down completely. TLC is also expected to reduce wear-and-tear on the turbines, reduce operation and management costs, and preserve the lifetime of the turbine components, the DOE said.
Source: POWERnews, DOE