info
Google Groups no longer supports new Usenet posts or subscriptions. Historical content remains viewable.
Dismiss
Obama clean energy loans leave taxpayers in $2.2 billion hole
3 views
Skip to first unread message
Bradley K. Sherman
Sep 7, 2020, 8:05:03 PM9/7/20
to
Taxpayers are on the hook for more than $2.2 billion in expected
costs from the federal government’s energy loan guarantee
programs, according to a new audit Monday that suggests the
controversial projects may not pay for themselves, as officials
had promised.
Nearly $1 billion in loans have already defaulted under the
Energy Department program, which included the infamous Solyndra
stimulus project and dozens of other green technology programs
the Obama administration has approved, totaling nearly about $30
billion in taxpayer backing, the Government Accountability
Office reported in its audit.
The hefty $2.2 billion price tag is actually an improvement over
initial estimates, which found the government was poised to face
$4 billion in losses from the loan guarantees. But as the
projects have come to fruition, they’ve performed better,
leaving taxpayers with a shrinking — though still sizable —
liability.
“As of November 2014, DOE estimates the credit subsidy cost of
the loans and loan guarantees in its portfolio — that is, the
total expected net cost over the life of the loans — to be $2.21
billion, including $807 million for loans that have defaulted,”
the GAO said in its report to Congress.
The green program loan guarantees were created in a 2005 law and
boosted by the 2009 stimulus. The first applications were
approved in 2009, and through 2014 the Obama administration had
issued some 38 loans and guarantees, covering 34 projects
ranging from nuclear power plants to fuel-efficient vehicles to
solar panels and wind-generation technology.
The Energy Department said it considers the loan program a
success.
“We believe that the data presented demonstrates that the
department’s Loan Programs Office is achieving its statutory
mission to accelerate the deployment of innovative clean energy
projects and advanced vehicle manufacturing facilities in the
U.S., while being a responsible steward of taxpayer dollars,”
Peter W. Davidson, executive director of the loan programs, said
in an official reply to the GAO.
Mr. Davidson said the expected loss to taxpayers has dropped
some $2.28 billion since the initial estimates, and he predicted
that the cost will continue to drop as projects mature and repay
their loans.
But most of that improvement came from one green vehicle loan
where the project’s credit rating improved dramatically, making
it far less likely the project would default. Another green
vehicle program, Tesla Motors Inc., has already repaid its loan
in full, helping the government’s balance sheet.
Indeed, leaving the vehicle loan program aside, the loan
guarantees office is deeper in the red than it was initially, by
nearly $500 million, chiefly due to defaulted loans.
Across the entire loan program there have been five defaulted
loans: two solar panel manufacturers, Solyndra Inc. and Abound
Manufacturing Solar LLC; two green vehicle programs, Fisker
Automotive Inc. and the Vehicle Production Group LLC; and one
energy storage project, Beacon Power.
GAO investigators said those technology projects were risky from
the start, and each had a shaky credit rating. By contrast, the
more than 20 projects up and running that focused on energy
generation or transmission have done well, with not a single
default, the investigators said.
GAO investigators have been warning for nearly a decade that the
loan programs are unlikely to pay for themselves overall.
From the beginning, the investigators said because companies
knew more about their projects and their own creditworthiness,
they had an advantage over the Energy Department. The GAO said
the companies were more likely to accept a federal loan
guarantee if the Obama administration underestimated the actual
risk of a project, leaving taxpayers on the hook.
Most of the loans are still in their infancy, but some are
paying off.
As of the end of 2014, the projects in the program have repaid
$3.6 billion in principal and another $810 million in interest.
The Energy Department says it expects, over the life of the
loans, to earn $5 billion in total interest — though that has to
be offset against the costs the federal government incurs for
borrowing to finance its spending, so that’s not pure profit.
In addition to the risky loans, the program isn’t collecting
enough money in fees to cover the costs of administering itself,
GAO investigators said, calculating that less than half of the
$312 million in administrative costs has been offset by fees.
Part of the problem is that the loan office didn’t even have
sufficient staffing until 2011, which meant it wasn’t able to
properly assess administrative fees. That problem has been
fixed, and the program is getting better at matching fees with
costs, the GAO said.
“At this time, it is too early to tell whether [the Energy
Department‘s] actions will result in sufficient funds to offset
[the loan guarantee program’s] future administrative costs,”
investigators said.
https://www.washingtontimes.com/news/2015/apr/27/obama-backed-
green-energy-failures-leave-taxpayers/
costs from the federal government’s energy loan guarantee
programs, according to a new audit Monday that suggests the
controversial projects may not pay for themselves, as officials
had promised.
Nearly $1 billion in loans have already defaulted under the
Energy Department program, which included the infamous Solyndra
stimulus project and dozens of other green technology programs
the Obama administration has approved, totaling nearly about $30
billion in taxpayer backing, the Government Accountability
Office reported in its audit.
The hefty $2.2 billion price tag is actually an improvement over
initial estimates, which found the government was poised to face
$4 billion in losses from the loan guarantees. But as the
projects have come to fruition, they’ve performed better,
leaving taxpayers with a shrinking — though still sizable —
liability.
“As of November 2014, DOE estimates the credit subsidy cost of
the loans and loan guarantees in its portfolio — that is, the
total expected net cost over the life of the loans — to be $2.21
billion, including $807 million for loans that have defaulted,”
the GAO said in its report to Congress.
The green program loan guarantees were created in a 2005 law and
boosted by the 2009 stimulus. The first applications were
approved in 2009, and through 2014 the Obama administration had
issued some 38 loans and guarantees, covering 34 projects
ranging from nuclear power plants to fuel-efficient vehicles to
solar panels and wind-generation technology.
The Energy Department said it considers the loan program a
success.
“We believe that the data presented demonstrates that the
department’s Loan Programs Office is achieving its statutory
mission to accelerate the deployment of innovative clean energy
projects and advanced vehicle manufacturing facilities in the
U.S., while being a responsible steward of taxpayer dollars,”
Peter W. Davidson, executive director of the loan programs, said
in an official reply to the GAO.
Mr. Davidson said the expected loss to taxpayers has dropped
some $2.28 billion since the initial estimates, and he predicted
that the cost will continue to drop as projects mature and repay
their loans.
But most of that improvement came from one green vehicle loan
where the project’s credit rating improved dramatically, making
it far less likely the project would default. Another green
vehicle program, Tesla Motors Inc., has already repaid its loan
in full, helping the government’s balance sheet.
Indeed, leaving the vehicle loan program aside, the loan
guarantees office is deeper in the red than it was initially, by
nearly $500 million, chiefly due to defaulted loans.
Across the entire loan program there have been five defaulted
loans: two solar panel manufacturers, Solyndra Inc. and Abound
Manufacturing Solar LLC; two green vehicle programs, Fisker
Automotive Inc. and the Vehicle Production Group LLC; and one
energy storage project, Beacon Power.
GAO investigators said those technology projects were risky from
the start, and each had a shaky credit rating. By contrast, the
more than 20 projects up and running that focused on energy
generation or transmission have done well, with not a single
default, the investigators said.
GAO investigators have been warning for nearly a decade that the
loan programs are unlikely to pay for themselves overall.
From the beginning, the investigators said because companies
knew more about their projects and their own creditworthiness,
they had an advantage over the Energy Department. The GAO said
the companies were more likely to accept a federal loan
guarantee if the Obama administration underestimated the actual
risk of a project, leaving taxpayers on the hook.
Most of the loans are still in their infancy, but some are
paying off.
As of the end of 2014, the projects in the program have repaid
$3.6 billion in principal and another $810 million in interest.
The Energy Department says it expects, over the life of the
loans, to earn $5 billion in total interest — though that has to
be offset against the costs the federal government incurs for
borrowing to finance its spending, so that’s not pure profit.
In addition to the risky loans, the program isn’t collecting
enough money in fees to cover the costs of administering itself,
GAO investigators said, calculating that less than half of the
$312 million in administrative costs has been offset by fees.
Part of the problem is that the loan office didn’t even have
sufficient staffing until 2011, which meant it wasn’t able to
properly assess administrative fees. That problem has been
fixed, and the program is getting better at matching fees with
costs, the GAO said.
“At this time, it is too early to tell whether [the Energy
Department‘s] actions will result in sufficient funds to offset
[the loan guarantee program’s] future administrative costs,”
investigators said.
https://www.washingtontimes.com/news/2015/apr/27/obama-backed-
green-energy-failures-leave-taxpayers/
Siri Cruise
Sep 7, 2020, 8:35:18 PM9/7/20
to
In article <42e76d173b95d9ed...@dizum.com>,
--
:-<> Siri Seal of Disavowal #000-001. Disavowed. Denied. Deleted. @
'I desire mercy, not sacrifice.' /|\
The first law of discordiamism: The more energy This post / \
to make order is nore energy made into entropy. insults Islam. Mohammed
"Bradley K. Sherman" <bksh...@oakland.wrecked.rectum> wrote:
> The green program loan guarantees were created in a 2005 law
Obama?
> The green program loan guarantees were created in a 2005 law
--
:-<> Siri Seal of Disavowal #000-001. Disavowed. Denied. Deleted. @
'I desire mercy, not sacrifice.' /|\
The first law of discordiamism: The more energy This post / \
to make order is nore energy made into entropy. insults Islam. Mohammed
Unum
Sep 8, 2020, 7:07:55 PM9/8/20
to
On 9/7/2020 6:54 PM, Bradley K. Sherman wrote:
> Taxpayers are on the hook for more than $2.2 billion in expected
> costs from the federal government’s energy loan guarantee
> programs, according to a new audit Monday that suggests the
A 'new audit' from 5 years ago, lol.
> Taxpayers are on the hook for more than $2.2 billion in expected
> costs from the federal government’s energy loan guarantee
> programs, according to a new audit Monday that suggests the
Meanwhile...
As Congress rushes out trillions of dollars to prop up businesses, the Energy
Department is holding on to tens of billions in clean energy loans.
the Title XVII loan guarantee program isn’t all, or even mostly, for renewable
energy. It is divided into $10.9 billion for advanced nuclear energy, $8.5
billion for advanced fossil energy and $4.6 billion for renewables.
0 new messages