Wednesday, February 06, 2008

Energy Secretary Samuel Bodman said he expects the first loan guarantees for low-carbon energy technologies to be issued before the end of the year, marking a significant milestone in a program that has faced relentless scrutiny by lawmakers. During wide-ranging testimony on the administration's budget request, Bodman was pressed by senators to go on the record in pledging that DOE would approve the first guaranteed loans this year.

Testifying Feb. 6 before the Senate Energy and Natural Resources Committee, Bodman responded to questions from Sen. Pete Domenici (R-NM), who appeared eager to put the secretary on the record over the implementation of the advanced technology loan guarantees program. The program's implementation had been subject to much controversy last year when the administration proposed a rule that, lawmakers said, was inconsistent with their original intent. Revisions to the final rule did eventually gain the support of key members of Congress.

“I would expect we would be in a position to issue loan guarantees before the end of the year,” Bodman said, noting that DOE has selected 16 final applications for further study, has completed meetings with those companies, and expects formal applications from them in the coming months.

The loan guarantee program was authorized in the Energy Policy Act of 2005 to underwrite loans for advanced energy technology projects that reduce, avoid, or sequester greenhouse gases. Four billion dollars worth of loan guarantees was appropriated for 2007, which DOE is working to issue. This initial round of guaranteed loans will be available for non-nuclear projects, as directed by Congress.

A FY 2008 omnibus appropriations bill set aside $38.5 billion for loan guarantees for FY 2008 and FY 2009. Of the $38.5 billion, $18.5 billion is for nuclear power facilities and $2 billion for front-end nuclear projects -- such as fuel enrichment facilities. The spending bill also provided $10 billion in loan guarantees for renewable and/or energy efficiency systems and manufacturing; $6 billion for coal-based power plants that incorporate carbon capture and sequestration; and $2 billion for advanced coal gasification.

In its budget request, the administration proposed that Congress extend the time period to issue the $38.5 billion worth of loan guarantees until 2011.