Energy Subcommittee Hearing - Risky Business Part 2: The DOE Loan Guarantee Program
2025-04-30
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Source: Congress.gov
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Unknown (SPEAKER_01)
Without objection, the chair is authorized to declare recesses of the subcommittee at any time. Welcome to today's hearing entitled Risky Business Part Two, the DOE Loan Guarantee Program. Opening statements. For me, I'm going to recognize myself for five minutes. Today, the Energy Subcommittee will hold the second installment of Risky Business, the DOE Loan Guarantee Program. This is a timely update from the first installment we held February of 2017, a hearing I also had the opportunity to chair. This morning, we will examine the Department of Energy's Loan Program Office, or LPO,
in this taxpayer investment portfolio made during the Biden administration. Further, we will explore LPL's role and future in supporting the next generation of energy technologies. In the Energy Policy Act of 2005, Congress authorized the Secretary of Energy under the Title 17 to provide loan guarantees to innovative and advanced energy technologies. including fossil energy, nuclear energy, renewable energy, and energy efficiency. However, Congress didn't stop there. Two years later, it expanded its authority by creating the Advanced Technology Vehicles Manufacturing, or ATVM, loan program in the Energy Independence and Security Act of 2007, which supported the domestic production of fuel-efficient advanced technology vehicles. With these vastly expanded authorities, the Obama administration made a series of investments which actually embroiled in bankruptcy. One famous case was the solar company Solyndra, which defaulted after receiving only a mere half a billion with a B dollars in loan guarantees from the Department of Energy. During our committee's 2017 hearing, I sat in this very seat and voiced my concern over the potential cost to the American taxpayer if any one of the many proposed projects, like the Ivanpah solar project, were to fail and default. Fast forward now to earlier this year, and the project has announced that it will close ahead of schedule, perhaps as early as the end of next year. The original plan was for this facility to operate under 2039, eventually paying back the 1.6 billion with the B dollar loan DOA awarded the company But this is no longer gonna be the case. With the passage of the Energy Act of 2020, infrastructure investment, Jobs Act IJA, and the Inflation Reduction Act, LPO again expanded its loan capacity in the scope of the projects. The Energy Act of 2020, excuse me, expanded eligible projects
They use already commercialized technologies. Likewise, IAJ expanded the scope of eligible projects under the ATVM to include medium and heavy duty vehicles, trains, maritime vessels, and hyperloop technologies. The Inflation Reduction Act established new programs such as the Energy Infrastructure Reinvestment EIR program under Section 1706 of Title 17 and increased LPO's loan authority over tenfold from $40 billion to $412 billion. New programs like the EIR program were given $250 billion in loan capacity, while the carbon dioxide transportation infrastructure finance innovation program was given a mere $25 billion. This does not include the $62 billion authorized for Title 17 and $55 billion for ATVM. So with these massive increases in scope and loan authority in October 2022, then-ranking member Frank Lucas and I sent a letter to DOE highlighting our concern regarding LPL's ability to, quote, manage its programs and make sound investments with federal funds given their past shortcomings and mismanagements, end quote. Despite our concerns, the Biden administration worked quickly to use its expanded authorities and eligible projects. The Government Accountability Office, GAO, released a report in February highlighting that LPO closed almost $25 billion in loan guarantees in the last quarter of 2024 alone. That is a rapid increase to the point GAO stated in its report, quote, it is uncertain whether LPO can still ensure it has the capacity and expertise to effectively monitor these loans and guarantees. You can't make this stuff up. Now, almost three years later, the concerns highlighted in our original letter were clearly well founded.
Today, I hope we can engage in a productive conversation about the merits and programs that this program has historically demonstrated, and hopefully our vision will go where it should be moving forward. I thank our esteemed panel of witnesses for their being here today to look for their testimony. With that, I yield back the balance of my time, and I now recognize the ranking member, Representative from North Carolina, for her opening statement.
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