Loan guarantee

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By Michael J. Gergen, Joshua T. Bledsoe, David E. Pettit and Tara L. Rice

President Obama recently announced that the Department of Energy (DOE) Loan Program Office (LPO) is expanding support for innovative “distributed energy projects” by adding $1 billion in available loan guarantees to support the deployment of these projects through the existing solicitations for Renewable Energy and Efficient Energy Projects and Advanced Fossil Energy Projects.  Eligible projects could include energy storage, smart grid technologies, cogeneration and methane capture for oil and natural gas wells, as well as roof-top solar and energy efficiency technologies that meet certain “innovation” requirements. For example, roof-top solar projects that are combined with storage may be eligible.

The LPO also is targeting distributed energy developers with special supplements to these two pending solicitations that make clear that existing program authority under Title XVII of the Energy Policy Act of 2005 and resources may be used to accelerate the deployment of distributed energy projects. The credit enhancement available through DOE’s LPO traditionally has been used to support utility-scale energy projects. In recognition of the important role of distributed energy in the future of US energy markets, the LPO is making a concerted effort to marshal program resources to support innovation in this growing segment.

By Michael Feeley and Aron Potash

A lawsuit which delayed and once threatened to dismantle California’s greenhouse gas (GHG) cap and trade scheme was largely resolved last week, removing one roadblock to California’s plan to be the first state to impose an economy-wide GHG trading program.  Under modified regulations adopted by the California Air Resources Board (CARB) on October 20, 2011, California will require certain emitters of GHGs to obtain allowances or offsets in amounts commensurate to their respective emissions…

By Eli W.L. Hopson

On April 14, the House and Senate passed, and on April 15, President Obama signed into law, the final Continuing Resolution (CR) for the remainder of FY 2011.  Section 1425 of the CR makes important modifications regarding the authority of the U.S. Department of Energy (DOE) to provide loan guarantees under its Title XVII Section 1703 and Section 1705 programs.  Section 1417 provides continued, though reduced funding levels, for DOE’s Advanced Research Projects Agency—Energy (…

By L&W Energy Attorneys

On March 31, 2011 Jonathan Silver, the Executive Director of the U.S. Department of Energy’s (DOE) Loan Programs Office (LPO), testified in front of the House Energy and Water Development Appropriations Subcommittee to discuss the LPO’s recent accomplishments and its 2012 budget requests.  Silver stressed that the deployment of commercially-ready clean energy technologies in the near term, as well as the longer term deployment of innovative clean energy technologies are critical to reaching the…

Clean energy projects have tremendous potential to create jobs and grow the economy and help the nation meet its energy needs in a more sustainable way, but regulatory and legal barriers to energy projects have substantially reduced job creation and economic growth while impeding efforts to bring new energy generation facilities on line, according to a recent economic study commissioned by the US Chamber of Commerce as part of its Project No Project.  The report, entitled, “Progress Denied: A Study on the Potential Economic Impact of Permitting Challenges Facing Proposed Energy Projects,” (PDF) found that legal challenges, threats of legal challenge, and regulatory hurdles caused the delay or cancellation of 333 energy projects which, if constructed and operated for twenty years, would have potential economic and employment benefits of  a projected $3.4 trillion.  These estimated benefits would include $1.4 trillion in employment earnings and one million or more jobs per year.

A recent brief by the Center for American Progress (CAP) –“Invest in America’s Clean Energy Future”–advocating against substantial cuts in funding for the U.S. Department of Energy (DOE) loan guarantee program proposed by the U.S. House of Representatives provides interesting and heretofore not publicly known details about the pipeline for projects seeking guarantees under Section 1705 of the Energy Policy Act of 2005, for which Division A of the American Recovery and Reinvestment Act of 2009 (Recovery Act)…

Clean energy development and deployment was one of the central themes of President Barack Obama’s State of the Union address.  The President urged Americans “to out-innovate, out-educate, and out-build the rest of the world” and stressed that, with respect to clean energy, “this is our generation’s Sputnik moment.”    President Obama emphasized two clean energy-related goals for the United States in his address: (a) to become the first country to have a million electric vehicles on the road by 2015 and (b) to have 80 percent of the country’s electricity be generated from clean energy sources.

Following the State of the Union address, the U.S. Department of Energy (DOE) submitted to Congress (PDF) the President’s Fiscal Year 2012 budget request of $29.5 billion, a $3.1 billion (11.8 percent) increase from the DOE’s FY 2010 budget.  Included in the proposed budget are (a) an additional $200 million to pay the credit subsidy costs for loan guarantees for innovative energy efficiency and renewable energy projects under Section 1703 of Title XVII of the Energy Policy Act of 2005 (PDF), which the DOE estimates should support an additional $1 billion to $2 billion in loan guarantees, (b) up to $36 billion in additional loan guarantee authority for nuclear power projects, and (c) $650 million (including $100 million from the Wireless Innovation and Infrastructure Initiative) for the Advanced Research Projects Agency – Energy (ARPA-E), to support early-stage clean energy research projects.

On September 7, 2010 Energy Secretary Steven Chu announced the issuance of the first loan guarantee under the Department of Energy’s (DOE) Financial Institution Partnership Program (FIPP).  The DOE issued the partial guarantee for a $98.5 million loan being made by John Hancock Financial Services to a subsidiary of the Nevada Geothermal Power Company (NGP) in respect of the 49.5 megawatt Blue Mountain geothermal project (PDF) located Humboldt County in Northwestern Nevada.  The blended interest rate for the loan was determined…