Loan guarantees to green energy firms would be eliminated or face new scrutiny under a draft bill released Thursday by Republicans in US House of Representatives.
The bill, by House Energy and Commerce Committee Chairman Fred Upton, Republican-Michigan, would block the Department of Energy from issuing new loan guarantees to renewable power developments under two popular programs. He dubbed the bill the "No More Solyndras Act," in reference to the California solar panel manufacturer that went bankrupt last year despite receiving a $535 million DOE loan guarantee.
In a statement, Upton said the bill is necessary to prevent mismanagement of federal funds, in light of the failure of Solyndra and two other recipients of DOE aid.
"Billions of dollars were hastily pushed out the door, with the Obama administration more worried about sending press releases announcing stimulus projects than if the projects were worthy and would create jobs," Upton said. "Sadly, the bankruptcies are starting to pile up."
DOE's Section 1705 loan-guarantee program for clean-energy companies was funded through the 2009 economic-stimulus program and provided more than $15 billion in financing to 29 projects, including solar-panel manufacturing plants, wind and solar farms, geothermal developments and biorefineries.
Out of a total of 28 companies that finalized loan guarantees with DOE, three have now filed for bankruptcy: Solyndra, Beacon Power and Abound Solar
The 1705 program expired last year, but the Obama administration has said it will continue to take applications from clean-energy companies through the similar 1703 loan guarantee program.
Upton's bill would ban all 1703 and 1705 loan guarantees for companies who applied after December 31, 2011. It would allow awards for applications received before that date, but only if DOE provides a report to Congress about its consideration of the guarantees, accompanied by a public recommendation by the Treasury Department.
The bill would also make it illegal to subordinate government debt below other creditors, as occurred last year, when DOE restructured Solyndra's debt in a last-ditch bid to save the company.
A hearing on the bill is scheduled for Thursday in the Energy and Commerce Committee.
