Congress Takes Aim at DOE-Administered Loan Guarantee Program

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Stoel Rives attorney Graham Noyes discussed in Power, Finance and Risk new Congressional proposals that would establish new loan guarantee programs for renewables projects outside the purview of the U.S. Department of Energy ("DOE"). DOE currently administers the Section 1703 and 1705 loan guarantee programs, established to encourage commercial use of new or significantly improved energy-related technologies and renewable energy and electric power transmission projects respectively. Under two bills introduced in the U.S. House of Representatives, an independent, wholly-owned government corporation akin to the Tennessee Valley Authority would be created to oversee and manage the loan guarantee program.

Noyes said the legislation could come to the floors of Congress as early as the second quarter, and a program launch would likely occur sometime in 2012. He notes that Congress has yet to determine the precise objective of the initiative, and that questions remain whether the program should support technologically innovative or proven technology projects, and whether it should be focused as an energy security program or low carbon program. "[The program] is on a lot of people's minds, but people have different agendas," Noyes said. Noyes predicted that competitiveness is the issue most likely to resonate given China's aggressive plans to surpass the United States in the renewable energy sector.

"Congress Weighs Revamp of Loan Guarantees" was published by Power, Finance and Risk, January 10, 2011.

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