U.S. Senators introduced a bipartisan bill last week that would reform the Department of Energy (DOE) loan guarantee program and establish a new independent agency to facilitate government clean energy investments.
The legislation, introduced by Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D-NM) and ranking member Lisa Murkowski (R-AK), implements a series of changes to the loan guarantee program, including creating a new "Clean Energy Investment Fund" to allow collected costs to be used to support more technology deployment.
According to a release from the committee, the basis of the bill is to shore up the existing program at DOE, then transition to a new financially-focused agency to perform and expand upon the duties of the program.
The new agency, called the Clean Energy Deployment Administration (CEDA), would be housed in the DOE and would be given the task of creating an "attractive investment environment for the development and deployment of clean energy technologies."
CEDA would be governed by a board of directors and an administrator, all of whom would be appointed with the advice and consent of the Senate. CEDA will also have a permanent Technology Advisory Council to advise on the technical aspects of new technologies and to help set goals for the administration.
The agency would provide various types of credit to support deployment of clean energy technologies including loans, loan guarantees and other credit enhancements as well as secondary market support to develop products such as clean energy-backed bonds that would allow less expensive lending in the private sector. The agency would also seek to accommodate riskier debt and thus provide a mechanism for deployment of the most innovative technologies.
CEDA’s mission would be to encourage deployment of technologies that are perceived as too risky by commercial lenders; thus, the agency is encouraged to back riskier technologies with a higher potential to address climate and energy security needs. The agency is to use a portfolio investment approach in order to mitigate risk and is to try and become self-sustaining over the long term by balancing riskier investments with revenues from other services and less risky investments.
The 21st Century Energy Technology Deployment Act (S. 949) is co-sponsored by Sens. Dorgan (D-ND), Voinovich (R-OH), Stabenow (D-MI), Lugar (R-IN), Shaheen (D-NH) and Burr (R-NC).
"This legislation is a bipartisan effort to position the U.S. to lead the development and deployment of clean energy technologies by ensuring that commercial financing for these technologies is readily available for the future," Chairman Bingaman said.
Murkowski said: "This bill will allow innovators to pursue promising new technologies by facilitating access to much-needed capital. It provides an opportunity to aggressively reduce our greenhouse gas emissions without imposing new mandates or regulatory burdens."
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