The Energy Policy Act of 2005 established the Department of Energy (DOE) Loan Guarantee Program to grant loan guarantees for innovative energy technologies. While the program’s intent was to aid emerging energy technologies, mature energy industries like the coal and nuclear industries, that for decades have received billions of dollars in subsidies, are earmarked to be some of the largest beneficiaries of the program.
Taxpayers should keep a close eye on this program as it moves forward. The Department of Energy has a poor track record running loan guarantee programs, quickly losing billions in the early 1980’s for loan guarantees given to the synthetic fuels industry.
And appropriators already seem to want to keep handing out giant loan guarantees to energy interests. This year’s House Energy and Water Appropriations Bill contains $47 billion in loan guarantee authority for the Loan Guarantee Program, which is an $8.5 billion increase over the 2008 level and the 2009 president’s request. This is a sharp change from the FY07 appropriation of only $4 billion and DOE’s FY08 request of $9 billion.
The $8.5 billion increase is allotted for renewable and/or energy efficiency projects. Notably, the Energy and Water legislation extends the loan guarantee authority through 2011 for funds earmarked for nuclear power facilities and through 2010 for the remainder of the loan guarantee authority. In last year’s omnibus appropriations bill the loan guarantee program authority expired in 2009 for all projects.
The Committee also makes available $440 million in budget authority to cover the Congressional Budget Office’s assessment of the cost of the program, in addition to $25,000,000 of advanced authority from the 2008 appropriations bill.
Here is how the $47 Billion included in the bill is distributed:
- $18.5 billion for Nuclear Power Facilities (extended through 2011)
- $28.5 billion Non-Nuclear Projects (extended through 2010)
- $6 billion for coal based power generation and industrial gasification at retrofitted facilities
- $2 billion for advanced coal gasification
- $2 billion for advanced nuclear facilities for the front-end of the nuclear fuel cycle
- $18.5 billion renewable and/or energy efficiency systems and manufacturing, and distributed energy generation, transmission and distribution
For more information, please contact Autumn Hanna at (202) 546-8500 x112 or autumn[at]taxpayer.net
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