WASHINGTON (AP) — The Energy Department on Wednesday approved two loan guarantees worth more than $1 billion for solar energy projects in Nevada and Arizona, two days before the expiration date of a program that has become a rallying cry for Republican critics of the Obama administration’s green energy program.
Energy Secretary Steven Chu said the department has completed a $737 million loan guarantee to Tonopah Solar Energy for a 110 megawatt solar tower on federal land near Tonopah, Nev., and a $337 million guarantee for Mesquite Solar 1 to develop a 150 megawatt solar plant near Phoenix.
The loans were approved under the same program that paid for a $528 million loan to Solyndra Inc., a California solar panel maker that went bankrupt after receiving the money and laid off 1,100 workers. Solyndra is under investigation by the FBI and is the focal point of House hearings on the program.
SolarReserve LLC, of Santa Monica, Calif., the parent company for Tonopah, is privately held. The Energy Department said its rules prevented it from discussing the company’s financial information. Sempra Energy of San Diego, which owns Mesquite, is publicly held.
Energy Department spokesman Damien LaVera said the two projects had extensive reviews that included scrutiny of the parent companies’ finances.
Chu said the Nevada project would produce enough electricity to power more than 43,000 homes, while the Arizona project would power nearly 31,000 homes. The two projects will create about 900 construction jobs and at least 52 permanent jobs, Chu said.
“If we want to be a player in the global clean energy race, we must continue to invest in innovative technologies that enable commercial-scale deployment of clean, renewable power like solar,” Chu said in a statement.
Senate Majority Leader Harry Reid, D-Nev., is a strong supporter of the Nevada project, which he says will help his state’s economy recover. Former Gov. Jim Gibbons, a Republican, also supported the project.
The loan approvals came just two days before a renewable energy loan program approved under the 2009 economic stimulus law is set to expire. At least seven projects worth more than $5 billion are pending.
Rep. Cliff Stearns, R-Fla., chairman of a House energy subcommittee that is investigating Solyndra, said the impending deadline was no reason to complete loans before they are ready.
“Solyndra was the product of a bad bet rushed out the door, and taxpayers are now on the hook,” he said. “We cannot afford DOE rushing out more Solyndras in these final hours.”
A government watchdog group said the Solyndra bankruptcy shows the need for greater oversight of all the department’s loan guarantee programs.
“It is time for a full audit of their activities, their management and their results,” said Tom Schatz, president of Citizens Against Government Waste, Washington-based advocacy group.
“Candidly, it might be time for the federal government to rethink the whole idea of loan programs,” Schatz added, calling the government’s track record on loan guarantees “lousy.”
Too often, the government either backs risky or failing ventures, resulting in a loss of taxpayer money, or subsidizes companies and industries that are mature and profitable and don’t need the money, such as the oil and gas industry, Schatz said.
Scott Crider, a spokesman for Sempra Generation, a Sempra Energy subsidiary that is developing the Arizona project, said its loan guarantee was far less risky than the Solyndra loan. Most importantly, the project has a 20-year agreement with Pacific Gas Electric Co. to buy power supplied by the solar plant, he said.
The purchase agreement is a key element of the project and will “provide assurance that there are sufficient revenues in place to support the loan guarantee,” Crider said.
A similar agreement is in place in Nevada. NV Energy, the state’s largest electric utility, has agreed to purchase power from the Tonopah tower, which will connect to NV Energy’s power grid. The Interior Department approved the project, known as Crescent Dunes, last year.
Solyndra, of Fremont, Calif., was the first company to receive a loan guarantee under a stimulus-law program to encourage green energy and was frequently touted by the Obama administration as a model. Since then, the company’s implosion and revelations that officials hurried review of the loan in time for a September 2009 groundbreaking has become an embarrassment for Obama as he tries to sell his job-creation program.
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Energy Department Finalizes $337 Million Loan Guarantee to Mesquite Solar 1 for Innovative Solar Power Plant
Washington, D.C. — U.S. Energy Secretary Steven Chu today announced that the Energy Department finalized a $337 million loan guarantee to Mesquite Solar 1, LLC to support the development of an innovative photovoltaic solar generating project. The optimized 150 megawatt (MW) alternating current photovoltaic (PV) solar generation project will be located in Maricopa County, Arizona, approximately 45 miles west of Phoenix. Sempra Energy, the project sponsor, estimates the project will fund up to 300 construction jobs.
“Domestic solar power generation strengthens and diversifies our nation’s clean energy portfolio and helps us compete in the global clean energy race,” said Secretary Chu. “Continued support for these innovative technologies will help bring down the cost of clean, renewable energy, like solar power, while creating jobs here at home.”
The Mesquite Solar 1 Project will be one of the first utility-scale PV power plants in the country to use U.S.-manufactured, innovative transformer-less and liquid cooled inverter technology. The technology allows for significant improvements in energy output, a decrease in operating costs and improved reliability. The facility will avoid the emissions of over 200,000 metric tons of carbon dioxide annually. The project is anticipated to generate nearly 350,000 megawatt hours of electricity in the first full year of production, or enough to power nearly 31,000 homes. This generation project is supported by a power purchase agreement to sell power to the Pacific Gas Electric Company
The Department of Energy’s Loan Programs Office (LPO) administers three separate programs: the Title XVII Section 1703 and Section 1705 loan guarantee programs, and the Advanced Technology Vehicle Manufacturing (ATVM) loan program. The Title XVII loan guarantee programs support the deployment of commercial technologies along with innovative technologies that avoid, reduce, or sequester greenhouse gas emissions, while the ATVM loan program supports the development of advanced vehicle technologies. To date, the Department has issued loans, loan guarantees or offered conditional commitments for loan guarantees totaling nearly $40 billion to support more than 40 clean energy projects across the United States, including several of the world’s largest solar generation facilities, three geothermal projects, the world’s largest wind farm, and the nation’s first new nuclear power plant in three decades.
For more information, please visithttp://www.lpo.energy.gov.
More solar companies led by Democratic donors received federal loan guarantees
A Daily Caller investigation has found that in addition to the failed company Solyndra, at least four other solar panel manufacturing companies receiving in excess of $500 million in loan guarantees from the Obama administration employ executives or board members who have donated large sums of money to Democratic campaigns.
And as questions swirl around possible connections between political donations and these preferential financing arrangements, the Obama White House suddenly began deflecting The Daily Caller’s questions on Wednesday to the Democratic National Committee.
Asked Wednesday to comment on the connection between large Democratic donors and Obama administration loan guarantees to the companies they represent, the White House responded to TheDC with a single sentence: “We refer your question to the Democratic National Committee.”
Concerns about the long-term viability of Solyndra, first made public by The Daily Caller back in February, have now expanded to include the financial health of other loan-guarantee recipient firms as well.
These companies have suffered from declining stock prices despite their favored status in the White House. Yet as the end of the federal government’s fiscal year looms on Friday, a new series of loans could be finalized amounting to more than nine times what taxpayers have already lost on the failed company Solyndra.
“Who was visiting the White House during this period of time?” Texas GOP Rep. Joe Barton asked when contacted by TheDC. Barton is a former chairman of the House Energy and Commerce Committee. “Who were they talking to and what were they talking about? Are there more loans at risk of not being paid back? Are these good investments or political favors?”
“The American people just lost a half billion dollars and they deserve answers to these questions before more money is wasted. Until we know exactly what happened, I think we should slow down this loan program and take a closer look at each case.”
“It is becoming more clear with each revelation that warning signs were ignored in the Solyndra case,” Barton continued. “Yet in the next 48 hours — because of a deadline that can still be changed — the Department of Energy is going to hand out another $5 billion in loans.”
Companies like First Solar, SolarReserve, SunPower Corporation and Abengoa SA have already, collectively, received billions in loans through Obama administration stimulus programs to build solar power plants in the southwestern United States.
Yet each, with the exception of the privately held SolarReserve, has seen its stock price hammered at the same time it was lobbying the Obama administration and Congress for billions in loan guarantees.