WASHINGTON – U.S. Senator Pete Domenici, ranking member of the Senate Energy and Natural Resources Committee, led a bipartisan group of eighteen Senators in urging President Bush to ensure that his Administration fulfills the Department of Energy’s (DOE) loan guarantee provisions in a manner consistent with congressional intent.

 

           Following commitments to strengthen the program gained by Domenici during negotiations with Office of Management and Budget (OMB) officials earlier this month, the lawmakers drafted a letter to President Bush asking his Administration to work toward the common goal of a robust loan guarantee program.  As Chairman of the Energy Committee in 2005, Domenici played a leading role in creating the program in the Energy Policy Act of 2005.

 

            The Administration views DOE’s Loan Guarantee program as a way to further President Bush’s Advanced Energy Initiative by encouraging early commercial use of new or significantly improved technologies in energy projects.  However, many believe the program as proposed by DOE would not accomplish those goals. 

 

           “Over the past two years, we have been pleased to see many of EPACT’s provisions implemented.  However, we have become exceedingly frustrated by the Administration’s failure to interpret properly the provisions of Title XVII—Incentives for Innovative Technologies…As we examine ways to strengthen our energy security, increase our global competitiveness, and reduce our nation’s greenhouse gas emissions, it is essential that we enhance the federal assistance to the development of the clean energy technologies within the United States,” the Senators stated in the letter.

 

             The specific concerns of the lawmakers centered on the provision authorizing DOE to grant guarantees for up to 80% of the project cost.  DOE has issued a proposed rule for the loan guarantee program that limits guarantees to 90% of the face value of the loan, a limitation not required by EPACT.  Equally frustrating for the lawmakers is the Administration’s cap on the total face amount of loans that can be guaranteed, thereby limiting assistance to only a few projects in small sectors of the energy industry.

 

            “We respectfully request that you personally take note of the significance of this title of EPACT and ensure that your Administration implements it without arbitrary limitations.  Otherwise, a key goal of EPACT to strengthen our energy security through deployment of innovative technologies will not be realized,” the Senators continued.

 

            Among the Senators who joined Domenici on the letter are Senators Arlen Specter (R-Pa.), Richard Lugar (R-Ind.), Mary Landrieu (D-La.), Larry Craig (R-Idaho), Lisa Murkowski (R-Alaska), Ken Salazar (D-Colo.), Benjamin Cardin (D-Md.), Mark Pryor (D-Ark.), James Inhofe (R-Okla.), Richard Burr (R-N.C.), Chuck Hagel (R-Neb.), John Barrasso (R-Wyo.), Thad Cochran (R-Miss.), Elizabeth Dole (R-N.C.), George Voinovich (R-Ohio), Norm Coleman (R-Minn.) and Gordon Smith (R-Ore.).

 

            The bipartisan letter comes one week after OMB nominee Jim Nussle and current OMB officials assured Domenici that they would provide discretion for up to 80% of a project's cost, even if it requires covering 100% of a loan.   In a letter to Domenici from OMB Deputy Director Stephen McMillin, the Administration declared its intent to support a final rule that would include discretion for DOE to issue guarantees for up to 100% of loans.

 

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