Update July 12: At today’s hearing on this bill, the House Energy Committee will once again (after dozens of similar hearings) call witnesses that include the acting head of DOE’s loan program and CEO of Abound Solar (which recently filed for bankruptcy.)
Rep. Cliff Stearns (R-FL), who has led the Solyndra investigation, now wants to investigate Cape Wind, the offshore project that’s beginning construction in Massachusetts.
"Cape Wind is another example of the Obama administration pushing "a dubious" green energy project for political reasons," he says in a press release. "It appears that an investigation is warranted to determine if the FAA acted inappropriately due to political pressure from the Administration."
The House Oversight and Government Reform Committee is going on a roadshow, with a hearing in Oklahoma tomorrow, titled "America’s Energy Future Part I: A Review of Unnecessary and Burdensome Regulations," and in shale gas country in North Dakota on Saturday for Part 2, "A Blueprint for Domestic Energy Production."
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Republican lawmakers are formalizing their assault on Department of Energy (DOE) loan guarantees for young clean energy companies with the "No More Solyndras Act."
The tagline is: Legislation Will Ensure Taxpayers Are Never Again Left on the Hook for the Administration’s Risky Bets
Even though two years of investigations uncovered no wrong-doing, and DOE’s program was started in 2005 under President Bush, Solyndra continues to be a Republican cause celebre.
Dissatisfied that their endless investigation has produced no results, they are taking action through legislation.
Introduced by House Energy and Commerce Committee Chair Fred Upton (R-MI) and Oversight and Investigations Subcommittee Chair Cliff Stearns (R-FL), the draft bill will be discussed among the two panels tomorrow.
Here’s what the bill would do:
DOE still has the power and budget to issue $34 billion in loan guarantees for applications submitted prior to 2012.
1. But the bill would bar DOE from granting loan guarantees to renewable energy projects for applications submitted after 2011 (which sounds like no more loan guarantees).
2. DOE would be required to report to Congress energy committees the terms of the guarantee and the technology it supports, purportedly to increase transparency.
3. There would be new review requirements including signoff from the Treasury Department, and DOE would be required to justify anything the Treasury didn’t approve.
4. DOE would be prohibited from restructuring the terms of any guarantee without consulting with Treasury and there would be a provision that forbids DOE from subordinating US taxpayer dollars to company investors in the case of default.
5. And what about the $10 billion in conditional commitments DOE made for two new nuclear plants? They can still move forward.
Yet, nuclear plants are proven to be a far more expensive (note that $10B for one plant compared to the $550M loan for Solyndra), risky bet than any renewable energy company or project.
"Our investigation discovered that despite repeated warnings by Obama’s own experts at DOE and OMB, a half-billion dollars for Solyndra was rushed out the door, and when Solyndra was out of cash, the administration doubled down and restructured the risky loan, putting the solar company’s wealthy investors ahead of taxpayers," say Upton and Stearns.
The Obama administration has repeatedly contended Solyndra’s demise was caused by its inability to compete against low-cost Chinese solar companies, as has been the case with so many older, extremely established companies like Q-Cells and Solar Millennium, which also filed for bankruptcy.
Abound, Beacon and Ener1, the other recipients of DOE’s loan guarantees that have shut their doors, will not be anywhere near a total loss for taxpayers. Solyndra is the only company in that category out of the $35 billion in guarantees DOE handed out.
An independent review of DOE’s renewable energy loan program concluded its portfolio is expected to perform well and holds less risk than Congress originally anticipated when they approved the program under President Bush. It also found DOE has done a good job of balancing the inevitable risks in the range of projects it selected.
Damien LaVera, a DOE spokesman, says the department is strengthening oversight of the program and "As we have consistently said, there is a degree of risk inherent in helping new, innovative technologies get off the ground. Congress recognized that risk by putting aside $10 billion in loan loss reserves. But this Administration believes that just because there is risk here, that doesn’t mean we should throw up our hands and cede the jobs of the future to China, Spain, or anywhere else."
He also says that less than 4% of the government’s $35 billion in loans, loan guarantees and conditional commitments went to solar manufacturers. 35% was awarded to solar projects that benefit from falling panel prices.
There was also risk in investing in the Internet and countless other technologies, which the government invested heavily in. An important role played by the federal government is to invest in game-changing technologies early on when private investors won’t take the risk That is exactly what DOE’s renewable energy program does – invest in companies and projects that are too risky for private investors to take on, but they will if they are backed by a government guarantee. Some of the biggest solar projects ever are under construction right now because they are backed by these guarantees.
But conservatives have used the situation to try to convince the US public that investments in renewable energy technologies are unreliable and risky. In January, the Americans for Prosperity advocacy group funded by the billionaire Koch brothers launched a $6 million television ad campaign slamming the Solyndra loan guarantee.
Here”s the draft "No More Solyndras Act":
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At least Solyndra left behind a body of research not a body of sludge. The Republicans are pushing their drill baby drill agenda with an oil spill in the Gulf costing the economy $billions and, one of many existing tar sand pipeline spills, the one in Michigan’s Kalamazoo River, has reached $800 million in clean up costs.
Sick priorities.
We must continue to push for clean energy. I is ethically wrong to vote for this bill! Lets keep pushing foward on alternative energy.
Thank you,
Alex Nix
I Worked on the Mesquite Solar 1 Project, by Sempra Generation, recipient of a DOE, $337 million loan Guarantee. Aprox. 840,000 solar panels produced by Suntech, will be installed on the Mesquite Solar 1, project. 90% of the panels are imported from China and aprox 10% of the panels are to be manufactured at the Suntech facility in Goodyear, AZ. The DOE Loan Guarantee program should have mandated the use of only domestically manufactured products, for these renewable energy projects. After all the DOE Loan Guarantee Program was created under the ARRA (American Recovery and Reinvestment Act,) in part, to advance “Renewable Energy” by helping fund these enormous projects and create 1,000,000’s of jobs for the struggling economy, here in the US.
Solyndra was a domestic Solar Panel Manufacturer in CA. Solyndra went bankrupt because it could not compete with the cheap overseas panel manufactures. If these DOE funded projects, were installing domestic manufactured panels, maybe Solyndra would still be in business. There is no quality difference in the panels produced by Suntech or Solyndra, but at least, Solyndra panel manufacturing here in CA. would have created more jobs here in the US. and more importantly, Solyndra workers, under the “Loan Guarantee Program”, would have received ” DBA Prevailing Wage” under the requirements in the “Loan Guarantee Program”. American tax dollars, invested here at home, benefit the economy overall by improving our quality of life and oppurtunity, here at home. From the Owners, to the Corporations, to the Subcontractors, to the Suppliers, to the manufacturers, to the workers and their families, everyone does better.
Myself, I was employed by a subcontractor (Zachry Industrial) to Sempra Generation, a “DOE Loan Guarantee Recipient”, who has not yet intentionally or correctly complied with Prevailing wage Requirements under the Davis Bacon Act, on the Mesquite Solar 1 project. The Mesquite Solar 1 project closed their Loan Guarantee on Sept, 29, 2011. As of that date, Sempra and its subcontractors were required to comply with the DBA Prevailing Wage Requirements. Non compliance caused workers to initiate a DOL investigation that quickly expanded from the local, understaffed DOL Phoenix Field Office, to the DOL Regional Office (SF, CA.) and the DOL Washington DC. “DOL Intergovernmental Affairs Contract Compliance Offices”. Both the DOL Investigators and the DOE Loan Compliance Office, are now actively involved in the immense investigative process, required for these enormous solar projects, subsequently “initiated solely by the underpaid workers” on those projects. As if the Federal Government didn’t see this coming!
Due to the DOL’s outdated Wage Determination, with insufficient classifications and unclear work definitions, more specific to Solar Projects, Corporations receiving Loan Guarantee’s, were and at this point, still are, attempting to drastically underpay employees on these massive projects. Objective, i asume, to pocket more easy government money for themselfs ! To hell with the worker !
Here in AZ. three major Solar projects, receiving DOE Loan Guarantee’s, are under Investigation by the DOL. Mesquite Solar ($300+ million), Auga Calente ($900+ million) and Solana ($1.4+ Billion) $2.6+ Billion, to 3 projects in Arizona alone, and no mandates requiring construction with only domestically manufactured products and no DOL or DOE enforcement yet, of the correct DBA Prevailing Wage Requirements for employees.
One would think our federal government would have put the “horse in front of the cart”, for once, before giving out all this taxpayer money to obviously greedy corporations. Initially and still, the idea that the DOE Loan Programs are necessary to force us into the “Renewable Energy Future” are true to obtain the “Independent Energy Future”, we so desperately need here in the US.. Hopefully, the government will get things straightened out, in all government agencies, before handing out more money, the next time, and renew the idea that greedy corporations need to be held accountable for not supporting domestic manufacturing and for noncompliance to Federal law for labor issues. Even if its more expensive for these projects, we need to keep our money vested, here at home.
To Underpaid: thanks for giving us insight into this, which hasn’t received press attention. Attempts to make USA-made part of qualifying for Recovery Act funds were rejected, and since then legislation was introduced for only US-made solar parts/ panels to get tax incentives, which has gone nowhere. http://www.sustainablebusiness.com/index.cfm/go/news.display/id/23707
The Obama admin. did put a tariff on solar panels from China, which we’ve written about extensively on this site.
2/15/2013 Just an update,
The DOL has completed their investigations on Mesquite Solar 1, and have concluded that due to misclassification of workers, the calculated back wages are in the millions! WOW, Just as I suspected! What I dident expect was that the DOE is now “Not supporting the DOL investigation findings and are argueing that the DOL should relax labor law on these loan guarantee projects, so they dont have to pay back wages.
Thats the news !!!. The DOE is now siding with the loan reciepients to try and mitigate the next scandal in the Loan Guarantee Program. “more Solyndras” is what the DOE fears.
There is no excuse for the DOE or these corporations that applied for and recieved these loan guarantees, to be disputing the DOL investigative process and findings.The truth is that they all knew about Davis Bacon Compliance, when they took the loan guarantees and contracts for these projects.The DOE has its own “Compliance Office” to over see these projects. Its in the DOE’s “Loan Guarantee Program Guidelines” (an actual written document) no excuses.
Mesquite Solar 1, is now complete and fully operational. Sempra Generation has been selling power since Feb. 1, 2012, when power blocks 1,2&3 were on line and producing 42 Mw. And they increased “sold” power output as each additional power block was completed. As of Dec 2013 full production was achieved. The project was scedueled for completion in May of 2013 and Zachry Industrial was rumored to be recieving a bonus kickback, for power sold, from Sempra. for each month the plant was operational ahead of sceduel. 150 MW to power 50,000 homes and Sempra Generation gives kickbacks back to subcontractors, however to pay back wages, they and their subcontractor are what? broke??
How is it that this corporation could get $337 million in federal money, for their construction, take in profit for power sold, while their general contractor sevierly underpaid its employees (proven fact of the DOL investigation), and also pay out bonus funds to their general contractor for early completion. And then say the DOL investigation is to harsh and if their made to pay those workers, who built the plant, what the DOL has calculated, they may go bankrupt.. your kidding right? Unbelievable but absolutly true.
I just wish a good law firm with some Judicial fortitude would bring suit from the bottom right up to the DOE, There is no justice…, yet! stay tuned