Taxpayers for Common Sense joined several groups today urging Congress to support changes to the 'No More Solyndras Act' in order to further protect taxpayers.
No More Solyndras Act Fails to Fully Protect Taxpayers:
Risky Loan Guarantees Left in the Queue
July 31, 2012
On behalf of our members and activists, we write because the No More Solyndras Act, while taking important steps in the right direction that we support, does not go far enough and leaves loan guarantees available that could cost taxpayers billions. As currently drafted, this legislation would allow troubled projects, like a $2 billion loan guarantee to the financially floundering United States Enrichment Corporation (USEC), to be finalized. Although the bill prevents new loan guarantees from the Department of Energy, it excludes projects that applied before December 2011, including USEC. These grandfathered loan guarantees went through the same failed review process and are just as likely, if not more so, to end in default, just like Solyndra.
For example, USEC’s stock prices have been trading at less than $1 per share for months and the company has already received a junk-bond credit rating from Moody’s Credit Rating Service. USEC’s financials are so bleak the company was recently given notice that it may lose its place on the New York Stock Exchange. USEC has continually asked for and received lifelines from the Department of Energy (DOE), including a recent $88 million influx of cash, but its long-term financial problems remain unresolved. Despite all of this, under the No More Solyndras Act, DOE still has the authority to award them a $2 billion loan guarantee for their Piketon, OH uranium enrichment facility. Adding insult to injury, the Piketon project has already encountered numerous cost overruns and technical hurdles itself.
We urge you to support changes to the current bill to ensure projects like USEC do not receive multi-billion dollar loan guarantees. Loan guarantees with even higher price tags remain on the docket and should not be allowed to move through DOE’s troubled process. In these budget times, taxpayers can ill-afford to be pouring any more money into financially questionable loan guarantees.
Taxpayers for Common Sense Action