The Energy Department defied Republican critics Friday by announcing that it had committed an additional $4.7 billion in loan guarantees toward four big-dollar clean technology projects just hours before the program’s funding expired.
The announcement marked a dramatic ending for the $18 billion loan guarantee program, which has been central to the administration’s push to create jobs and promote green technology. Simultaneously, the program has come under fire for its handling of a half-billion-dollar loan to Solyndra, a solar company that collapsed in August.
The program’s congressionally approved funding expired at midnight Friday as the federal fiscal year ended. The effort to commit money before the books closed came at a delicate time for the Energy Department, which for weeks has battled allegations that it erred by rushing to extend a guarantee to Solyndra.
Republican lawmakers have charged that the Solyndra debacle occurred because the department failed to properly vet its first big project in the early days of the program. As the deadline neared for committing funds, the department closed half of its deals in the final two months.
The projects approved Friday were a $1.2 billion loan guarantee for a “solar ranch” project in California; a $1.4 billion guarantee for a rooftop solar-generation project; a $1.5 billion guarantee to support development of one of the world’s largest solar photovoltaic plants; and a $646 million thin-film solar-generation project.
Solyndra won a $535 million loan guarantee in September 2009 and was repeatedly praised by President Obama and Energy Secretary Steven Chu. But the company collapsed without warning in August, putting 1,100 people out of work and leaving taxpayers liable for the loan. Last month, FBI agents raided the company’s Silicon Valley headquarters and seized files and computer records as part of an investigation into suspected accounting fraud and misrepresentation of finances.
White House press secretary Jay Carney said Friday that, despite criticism of the loan guarantee program, Chu retains the president’s “full confidence.”
“Obviously, ultimately the head of that department is responsible for it, but let’s be clear: There were numerous people involved who were career professionals and work on those kinds of issues every day,” Carney said.
Chu said in a statement that he considered the newly announced projects to be “remarkable” in their innovation and “critical” to creating clean energy jobs.
“To win the clean energy race we must invest in projects like this that fund jobs and increase the generation of clean, renewable power in the U.S.,” Chu said. “Innovation and investments in America’s clean energy future are critical to our continued competitiveness in the global market.”
An Energy Department statement stressed that the projects were closed only after extensive reviews to assess their potential for financial, technological and market success.
“We are confident that supporting these projects will help American companies compete in the global clean energy market,” the statement said.
Meanwhile, some guarantee winners worked to distance themselves from Solyndra
The largest investor in Solyndra was Argonaut Private Equity, an investment fund for a nonprofit organization founded by George Kaiser, a Tulsa billionaire and Obama fundraiser. Argonaut owns about a 3 percent stake in SolarReserve, the sponsor of a solar energy project that the Energy Department on Wednesday awarded a $737 million loan guarantee. The managing director of Argonaut, Steven R. Mitchell, sits on Solyndra’s board of directors and serves on SolarReserve’s investors committee. SolarReserve’s Web site lists Mitchell as a “board participant.”
“People are picking up on that, thinking, ‘Here we go again,’ ” SolarReserve chief executive Kevin Smith said in an interview. But he stressed that the similarities between the projects are few.
The Energy Department accelerated its approval of clean energy projects as Friday night’s deadline drew near. Since August, it had finalized multimillion-dollar loan guarantees at a rate of more than one a week. That push drew fire from government watchdogs.
Republicans questioned whether the program had bolstered the nation’s economy.
“In a last-minute mad dash to beat the stimulus deadline, DOE today rushed out an unprecedented tidal wave of taxpayer dollars. And the question still remains, where are the jobs? American taxpayers are already on the hook for half a billion dollars for the sins of Solyndra. What surprises does DOE have in store from today’s rush job?” said Rep. Cliff Stearns (R-Fla.), chairman of the oversight and investigations subcommittee, which has been investigating the program for months.
The agency said Stearns had previously written a letter supporting a loan guarantee for a biofuels project in his district led by New Planet Energy.
House Speaker John A. Boehner (R-Ohio) on Friday complained in a blog post that the Obama administration had not yet extended loan guarantee support to USEC’s “American centrifuge” project in Piketon, Ohio.
The federal stimulus act provided about $18 billion for loan guarantees to help jump-start clean energy projects that could create jobs and lessen U.S. reliance on foreign oil. The guarantees make it easier for businesses to secure loans because lenders know that if the company defaults, taxpayers will assume the debt. Under the law, the loans had to close and companies had to have started construction before Sept. 30.
Obama made the program a high-profile priority, traveling the country to visit clean-tech factories and drum up public enthusiasm. Two smaller loan guarantee programs will continue into the new fiscal year.
Law enforcement officials on Friday characterized the investigation into Solyndra as a serious, full-scale criminal probe of the company and its executives, not a preliminary inquiry.
Officials stressed it will take time to sift through the material seized.
Also Friday, the Justice Department asked the U.S. Bankruptcy Court to appoint a trustee to oversee Solyndra’s handling of its bankruptcy case, saying the company has refused to answer questions about its operations and finances because it feared that it would be subject to “investigation and possibly litigation.’’
SolarReserve’s project involves development of a 110 megawatt solar-power plant near Tonopah, Nev. In the first development of its kind in the United States, an array of mirrors will direct solar heat toward a tower of molten salt, which will serve as a heat-transfer and storage medium. The operation, on land leased from the Bureau of Land Management, is expected to fund 600 construction jobs and 45 permanent jobs. To be known as the Crescent Dunes Solar Energy facility, the project is expected to produce enough electricity to power more than 43,000 homes.
Smith, the SolarReserve chief executive, said the company “went through a very rigorous two years of due diligence. This is without question the most rigorous due diligence process we’ve been through.”
Major investors in SolarReserve include US Renewables Group, Good Energies and Citigroup. Financial records listed Argonaut’s investment in the company in 2009 as worth $6.8 million.
A spokesman for Kaiser declined comment but confirmed that Argonaut had “a small ownership position” in SolarReserve. Kaiser has said he played no role in helping Solyndra.
Smith acknowledged that the questions surrounding Solyndra have put his company in an uncomfortable spotlight. “People are scouring our staff lists, looking for parking tickets. It’s not good for business,” he said.
Even in light of that downside, the Energy Department’s backing offers the opportunity to push forward with an important project, he said.
“It’s a huge milestone for us and the technology,” Smith said. “We’re really excited about it.”
The Department of Energy closed four deals Friday worth $4.7 billion as the clock ticked down to a midnight deadline to finalize loans in a controversial program causing political problems for the White House.
●A $1.2 billion loan guarantee for SunPower to build its California Valley Solar Ranch, a utility-scale solar project that will use single-axis trackers controlled by wireless devices to tilt modules to absorb the most sunlight.
●A $1.4 billion loan guarantee for Project Amp, a rooftop solar-generation project that will support the installation of about 752 megawatts of photovoltaic solar panels across approximately 750 rooftops owned and managed by Prologis. NRG Energy is the lead investor for the first phase of installations.
●A $646 million loan guarantee to Antelope Valley Solar Ranch 1 in Los Angeles County, a thin-film solar-generation project recently acquired by Exelon. The project will feature inverters with voltage regulation and monitoring technologies that are new to the U.S. market. The inverters increase reliability of large-scale solar-power plants. Antelope Valley gets support from a power-purchase agreement to sell the power it will generate to Pacific Gas & Electric.
●$1.5 billion in partial guarantee to support two phases of the Desert Sunlight project, which is slated to be one of the world’s largest solar photovoltaic plants and will be located on federal land managed by the Bureau of Land Management in Riverside County, Calif. Phase I will generate 300 megawatts of power, which will be sold to Pacific Gas & Electric; Phase II will generate 250 megawatts of power, which will be sold to Southern California Edison.
Staff writer Jerry Markon and staff researcher Alice Crites contributed to this report.