The Department of Energy (DOE) has the authority and responsibility to provide loans and loan guarantees for innovative and other high-impact energy-related ventures through its Loan Programs
Office (LPO). In recent years, Congress added two new loan programs and hundreds of billions of dollars in new loan authority for the LPO to manage, and the number of applications for loans and guarantees increased substantially since.
In
a report recently published by the Government Accountability Office (GAO), the office found that DOE is not on track to issue loans in the amounts Congress has authorized.
As the report notes: "a key example of this is the Energy Infrastructure Reinvestment Program. Enacted in August 2022, it received $250 billion in loan authority due to expire September 30, 2026. However, as of September 30, 2024, the office had
made one loan for about $1.4 billion. While it has a total of $108.3 billion in outstanding submitted applications for loans and guarantees, the program almost certainly will fall short of the $250 billion in loan authority." The GAO states that "DOE needs to thoroughly review the current applications to ensure the government's interests are protected." GAO also found that DOE's process for determining the eligibility of a program to receive disbursement does not always identify whether projects
are sufficiently innovative to qualify.
GAO made the following recommendations to DOE to address these concerns:
- DOE should ensure that LPO undertake an annual comprehensive review to...
- ...identify and correct errors in application review guidance
- ...assess the completeness and accuracy of its application review documentation, including evaluating any deficiencies in the
documents, determining appropriate corrective actions, and evaluating the effectiveness of implemented remedies
- ...identify application review training needs and to evaluate the extent to which training addressed deficiencies
- DOE should ensure that LPO updates application review guidance for Section 1703 loans to include an evaluation of whether a project qualifies as innovative at the time the term sheet is issued.
According to the GAO, DOE concurred with three of the above these recommendations; DOE did not concur with GAO's recommendation to review innovativeness at the time of conditional commitment. GAO also made the following recommendation for congressional consideration:
- Congress should consider making changes to the authority for LPO's five loan programs or reducing appropriations to reflect what the LPO is likely to use before the authority expires.
To read the full report, click here.
To read summary of the report, click here.
