DOE can’t mishandle the truth

The Southern Alliance for Clean Energy is suing the Energy Department because the department has not adequately responded to a request for information regarding the celebrated loan guarantee recently awarded to Southern Company to build two nuclear reactors in Georgia.

The news is obviously not that DOE did not disclose information. The news is that someone is actually holding the administration accountable.

The Alliance says the information withheld is crucial to the average American wallet and the way that DOE would not disclose it, is egregious.

In a telephone press conference today, Larry Sanders, acting director for the Turner Environmental Law Clinic at Emory University School of Law, and attorney for SACE said, “Documents were so heavily redacted it was like a joke.”

DOE offered Southern Company an $8.3 billion conditional loan guarantee in February with a lot of pomp and circumstance–a White House event hosted by the President himself. The company met its conditions and sealed the deal in June.

In its lawsuit, the Alliance says it filed a FOIA request on March 25, well before the deal was inked, for information regarding the correspondence between DOE and the Southern Company affiliates involved in the loan guarantee award.

“We don’t have a whole lot of detail about the terms of the deal, what kind of skin in the game Southern [Company] and its partners are putting into it…exactly what amount that is…we constantly have argued that too much of the risk [falls on taxpayers],” said Stephen Smith, SACE’s executive director.
“What we’re trying to get is the details.”

The Alliance wants to see the paperwork on the general terms and conditions of the loan guarantee as well as the paper trail on the environmental review, and DOE’s analysis of the utility’s credit.
What the Alliance received from DOE was late, and key information was redacted, blacked out, as it were.

“DOE has chosen to respond in a piece meal fashion,” Sanders said. “Rather than provide us with one response, they provided us with a handful of documents; That left us in a position of not being satisfied.”

The Alliance wants to know that if the utility defaults on its loan, the American taxpayer is not left holding the bag.

By law, DOE was supposed to respond was April 22 to the FOIA request, well before Southern Company and DOE finalized the deal on June 11.

“There’s been nothing but recalcitrance from this agency. It’s odd. The administration prided itself on being the most transparent agency. It’s the opposite of transparent. It’s opaque,” Sanders said.

I’ve covered the loan guarantee program since its inception in the 2005 Energy Policy Act.
I’ve covered it through both the Bush and Obama administrations. And, regardless of the man in charge, it’s been opaque.

The idea initially was to get new clean energy technologies to market by making it more attractive for investors to invest in them.
DOE’s own Web site says the program “paves the way for federal support of clean energy projects that use innovative technologies, and spurs further investment in these advanced technologies.”

The theory was that if Wall Street sees the US Treasury backing the loans, they might make the loan in the first place.
Things haven’t shaken out quite like that. The program has been riddled with red tape. Too many applications, not enough bureaucrats to handle them and illiquid markets have stymied the loan guarantee program. Some investors don’t think government support of its program makes the technologies any more attractive.

Despite this, Congress has expanded the loan guarantee program over the past five years through two energy bills and the annual budget process to its current $77 billion in loan guarantee authority.

All the while, the Southern Alliance says its been waiting for answers about how that June 11 loan guarantee is structured, and the modeling used to define the federal subsidy for starters.

During a press conference Tuesday, two themes notably surfaced.

First the Obama administration is anything but transparent about this federal subsidy program despite administration promises otherwise.

Second, the Obama administration is bowing to the nuclear industry.

That’s why Taxpayers for Common Sense has been critical of the program and that’s why Steve Ellis, the organization’s vice president seemed irate about DOE’s latest move to withhold information about a major loan guarantee.

Over the years I’ve spoken to DOE about its program and supporting the nuclear industry was never part of the original plan. The program was specifically designed to inspire new clean energy technology to enter the marketplace.

The Alliance says there should be transparency regarding all loan guarantees in all sectors.
But the fact that the lack of information was related to a nuclear loan guarantee only infuriated the Alliance more. In some ways the unsavory commentary about the fact that it was a nuclear loan guarantee seemed to dilute the facts in the case at hand.

The one group today that stayed on message about transparency was the Taxpayers for Common Sense.
“Taxpayers are Forced to buy a pig in a poke,” Ellis said.
“The program is skewed and people administrating the program are skewed because they are looking after industry instead of taxpayers.”

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