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Pursuant to a congressional request, GAO reviewed the status and progress of the demonstration projects funded under approved cooperative agreements in the Department of Energy's (DOE) Clean Coal Technology (CCT) Program.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Energy 1. To obtain maximum benefits from CCT Program funds, the Secretary of Energy should direct the Assistant Secretary for Fossil Energy to include as a factor in project selection decisions an assessment of whether the technology to be demonstrated is likely to be commercialized without federal assistance and avoid selecting technologies that could advance in the marketplace without federal funding.
Closed - Not Implemented
DOE contends that it cannot determine whether a technology is likely to be commercialized without federal funds. Although GAO believes that DOE can and should make such an assessment before selecting a project, this recommendation is being closed because 1 year has elapsed since GAO provided its followup views to the congressional subcommittee that requested the review.
Department of Energy 2. To obtain maximum benefits from CCT Program funds, the Secretary of Energy should direct the Assistant Secretary for Fossil Energy to determine that the potential market for the proposed technology is large enough to warrant demonstrating the commercial application of the technology with federal funds.
Closed - Implemented
DOE believes that the goal of this recommendation is being achieved by its current project proposal evaluation procedures. DOE does not plan to evaluate the potential incremental benefits of investing federal funds in individual projects and select projects with the largest potential payoff, as GAO suggested. Therefore, this recommendation is being closed.
Department of Energy 3. To obtain maximum benefits from CCT Program funds, the Secretary of Energy should direct the Assistant Secretary for Fossil Energy to make projects ineligible for selection if their financing or economic viability is in doubt.
Closed - Implemented
DOE contends that it has increased the weight given to financial viability considerations in selecting more recent projects and that the recommendation is now unnecessary. The GAO report acknowledged that this and other related actions are steps in the right direction. However, DOE continues to rank all projects for selection consideration, regardless of their financial situation.
Department of Energy 4. The Secretary of Energy should direct the Assistant Secretary for Fossil Energy to analyze the effect that recoupment provisions have had on industry participation in the CCT Program and the likelihood of recovering the federal investment. On the basis of this analysis, DOE should reevaluate its recoupment policy to determine whether it should be strengthened to provide greater assurance that the federal investment in successfully demonstrated technologies will be recovered.
Closed - Implemented
DOE completed its report on lessons learned from its experience in implementing its policy to recoup the federal investment in successfully commercialized technologies developed under the Clean Coal Technology demonstration program. The report discussed the evolution of the recoupment policy for the clean coal program and provided input and guidance to DOE's Department-wide recoupment policy that is being developed as a result of a recommendation in another GAO report (GAO/RCED-96-141, June 26, 1996). GAO will prepare an accomplishment report when DOE's department-wide recoupment policy, which is undergoing review, is finalized and approved. DOE expects the policy to be approved by the end of December 1998.
Department of Energy 5. The Secretary of Energy should direct the Assistant Secretary for Fossil Energy to complete the development of procedures for assessing and reporting on the adequacy of sponsors' final project reports.
Closed - Implemented
DOE has established a new concept called a post-project assessment report that will discuss DOE independent assessment of a technology, the success of the demonstration in collecting needed data for commercialization, and the expected costs and environmental benefits. DOE has issued a report on one completed project and is scheduling time frames for completing other reports. This procedure and the public reports should fulfill the objective of the recommendation.

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