Department of Energy:

Status of Loan Programs

GAO-13-331R: Published: Mar 15, 2013. Publicly Released: Mar 15, 2013.

Additional Materials:

Contact:

Franklin W. Rusco
(202) 512-3841
ruscof@gao.gov

 

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What GAO Found

As of January 29, 2013, Department of Energy (DOE) was considering using $15.1 billion of the $34.8 billion in remaining loan guarantee authority for loan guarantees requested by 13 active Loan Guarantee Program (LGP) applications. According to DOE officials, the agency planned to use all of the remaining $170 million in credit subsidy appropriations to support active applications for energy efficiency and renewable energy projects. DOE considered an additional 27 LGP applications requesting a total of $73 billion to be inactive. The loan guarantee authority and credit subsidy appropriations do not expire.

In addition, as of January 29, 2013, DOE was not actively considering any applications for using the remaining $16.6 billion in loan authority or $4.2 billion in credit subsidy appropriations available under the Advanced Technology Vehicles Manufacturing (ATVM) loan program. DOE considered the seven ATVM loan program applications it has, requesting a total of $1.48 billion, to be inactive for reasons including insufficient equity or technology that is not ready. Most applicants and manufacturers we spoke with told us that, currently, the costs of participating outweigh the benefits. Although the ATVM loan program is accepting applications on an ongoing basis, according to DOE officials, DOE is not likely to use the remaining ATVM loan program authority given the current eligibility requirements. As with the LGP, the loan authority and credit subsidy appropriations for ATVM do not expire.

Why GAO Did This Study

The LGP for innovative energy projects was established in Title XVII of the Energy Policy Act of 2005 to encourage early commercial use of new or significantly improved technologies in energy projects. The act-- specifically section 1703--originally authorized DOE to guarantee loans for projects that (1) use new or significantly improved technologies as compared with commercial technologies already in service in the United States and (2) avoid, reduce, or sequester emissions of air pollutants or man-made greenhouse gases. Subsequently, in December 2007, Congress enacted the Energy Independence and Security Act (EISA), which made the nation's corporate average fuel economy standards for newly manufactured passenger vehicles more stringent by requiring significant increases in the fuel economy of the vehicles being sold in the United States by 2020. In addition, EISA established the ATVM loan program, which provides loans for projects to produce more fuel-efficient passenger vehicles and their components.

GAO has an ongoing mandate under the 2007 Revised Continuing Appropriations Resolution to review DOE's execution of the LGP and to report our findings to the House and Senate Committees on Appropriations. Because DOE is administering the LGP and ATVM programs through one Loan Programs Office, we included both programs in this review. Our objectives for this report were to determine the status of DOE's efforts to use the remaining loan and loan guarantee authorities and remaining credit subsidy appropriations for (1) the LGP and (2) the ATVM loan program, including selected applicant views on these efforts.

We are making no recommendations in this report.

For more information, contact, Frank Rusco at (202) 512-3841 or ruscof@gao.gov.

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