Washington, D.C. – Chairman Domenici today received notice from the Department of Energy of its intent to transfer $2.7 million dollars of appropriated FY06 funds for the creation of the Loan Guarantee Office called for in the Energy Policy Act of 2005. The funds will be used to create and staff the office and devise the regulatory framework for the Innovative Technologies Loan Guarantee Program.

The new office will review loan applications and award and administer loan guarantees for innovative technologies designed to produce clean energy in America from a variety of sources, including coal plants using clean coal technologies and advanced nuclear reactors. The loans can also be used for innovative energy conservation efforts such as the retooling of auto manufacturing plants for hybrid vehicles.

Chairman Domenici’s statement:

“I consider this loan guarantee program to be one of the most promising titles in the energy bill for revolutionizing energy production and conservation. We must remove the market barriers that prevent emerging technologies from being deployed in mines, power plants and factories across America.. We have known for years how to make our energy production cleaner but we haven’t, until now, been able to assist in the deployment of these technologies without burdening the taxpayer. This program has my full support.”

The guarantee program might be used for some of the 25 new nuclear power plants currently being considered as well the half dozen IGCC plants proposed. It can also be used for renewable energy projects, hydrogen fuel cell technology, carbon capture and sequestration projects, the construction of refineries for gasoline, ethanol and biodiesels and the efficient generation, transmission and distribution of electricity.

The new loan guarantee program originated in the Senate and is codified in Title XVII of EPAct05.  The program is designed to place the cost of the federal loan guarantees on the companies seeking the guarantees and not the taxpayers. Other loan guarantee programs require a federal appropriation equal to the risk of default as assess by the Congressional Budget Office. The industry participants pay the sum back with interest. This program retains that component but also offers a new option:  DOE may require the company seeking the guarantee to place into the U.S. treasury a sum equal to the assessed risk of default.