WASHINGTON – U.S. Senator Pete Domenici, ranking member of both the authorizing and appropriations subcommittees with jurisdiction over the Department of Energy, today received assurances from DOE officials that the Bush Administration’s proposed FY2009 budget will allow the federal loan guarantee program to fully operate.

 

            Domenici, a longtime advocate of loan guarantees, lamented the delay in getting the program off the ground at an Energy and Water Appropriations Subcommittee hearing to discuss the Bush Administration’s FY2009 budget proposal.   Loan guarantees for clean energy technologies were authorized in the Energy Policy Act of 2005, but the implementation of the program has been slow.

 

            “In 2005, we thought we had passed a loan guarantee provision that was self executing and self-financed.  Given the major energy challenges we face, the need for development of clean technologies is critical.  I want to make absolutely sure that the Department of Energy has everything it needs to operate the program that way it was intended,” Domenici said.

 

            In response, Domenici was assured by David Frantz, Director of the Loan Guarantee Office, that the proposed FY2009 budget will provide adequate resources to operate the program.  For FY2008, $38.5 billion was provided for loan guarantees.  As of yet, however, DOE has not provided the Office of Management and Budget with a plan to solicit proposals.

 

            Domenici also noted that he strongly disagreed with a decision by the Congressional Budget Office (CBO) to charge 1 percent of the cost of the loan guarantee program.  The loan guarantee program is intended to be self financing, and the Department of Energy is required to cover the costs of the program.   While Frantz agreed with Domenici’s assessment, CBO has assessed the program a charge of $355 million against the total loan volume of the DOE loan guarantee program despite the fact that DOE will not award the full amount in FY2009. 

 

            “The CBO decision takes away from other DOE priorities if it is not resolved.  I intend to work with DOE, OMB and CBO to ensure that the credit subsidy model is sound,” Domenici said.

 

            On a different note, Domenici said that Congress must address the $222 million shortfall created by the lack of funding for weatherization in the Department’s budget request.  He also reiterated his support for strong funding levels for DOE’s Office of Science, which he believes is critical to developing new technologies.  The overall budget request contains a $749 million increase for science, which translates into more money for research and development.

 

            “Sometimes, it seems as though the American people don’t believe that the government is committed to the development of clean energy alternatives, but this subcommittee has proven that we are very serious.  I applaud the proposed increases in the budget for development of new technologies because they present our best chance of becoming less dependent on foreign sources of oil,” Domenici said.

 

The Senate Energy and Water Development Appropriations Subcommittee is expected to soon begin developing its version of the FY2009 Energy and Water Appropriations Bill.