Too Much Cash For DOE?

By: Dipka Bhambhani, Published: 02/05/10 12:28pm

The Energy Department says it needs seven percent more in 2011 than it has in its 2010 budget.

Specifically it wants a boost in clean energy research and development and federal loan guarantees.

The ranking Republican on the Senate Energy and Natural Resources Committee told Energy Secretary Steven Chu this week she thinks DOE might not need anymore money between unspent stimulus dollars and a hefty unused 2010 budget.
"At a time of record debt and another year with a record deficit, we should ask ourselves if the department truly needs authority to spend more this year when we know that DOE is having difficulty spending the money that it already has," Alaska Senator Lisa Murkowski told Chu during a budget hearing Thursday.
DOE has spent only $6 billion of its $37 billion stimulus and that it has not spent its $65 billion 2010 budget yet.

On the stimulus, she said, spending wasn't done in a "timely targeted and temporary" manner.

In its fiscal 2011 budget request, DOE makes it clear that short-term cash infusions to private clean energy projects is the way to develop the clean energy economy. DOE wants $36 billion in new loan guarantees for nuclear projects and $500 million to support $3 to $5 billion in renewable energy loan guarantees.
DOE also calls for $300 million for the ARPA-E program to fund new high-risk innovative ideas cropping up across the marketplace.

"I think in this department we recognize that there is great opportunity," Murkowski told Chu. "But again, at a time when we are looking to reduce our budgets everywhere, we've got to understand what is out there already authorized, your ability to spend it out and do it responsibly."

Chu blamed the states and local governments for not acting efficiently enough to get the federal dollars out to the communities.
He said, "We are disappointed."

For example, DOE awarded $5 billion to states for weatherization projects, he said. But, "the states widely vary in how they're getting the money out," Chu said. Some states use 20 percent of that money on administration alone. Others don't spend a dime. "As we became aware of that, we are now sending people out to states to try to help them get moving," Chu said.

Weatherization was a program DOE has said continuously would provide the most immediate jobs to the languishing economy.

The DOE staff is going out to states and local governments with a uniform way to get the money out, Chu said. "Many of these organizations aren't used to dealing with the magnitude of money and federal rules," he added.

He told Murkowski, "A lot of the frustration I share with you is we are spending a lot of our time trying to help the local agency spend the money, just obligating the money to local agencies...is not enough."

Murkowski also criticized the department for not issuing a single nuclear loan guarantee though it had authority under the 2007 Energy Independence and Security Act to issue $18.5 billion for nuclear loan guarantees.

Chu said the department was understaffed when the department kicked off its loan guarantee program in 2006 under the Bush Administration.

"We went from zero to essentially now 11," he said. The loan guarantee has about a dozen staff members now led by former managing partner of Core Capital Partners, Johnathan Silver.

The Alaska senator said she is also concerned that DOE is likely to get another cash infusion through a jobs bill expected to be released next week.