Full Title: Energy: Federal Support for Renewable and Advanced Energy Technologies
Author(s): U.S. Government Accountability Office
Publisher(s): U.S. Government Accountability Office
Publication Date: 4/2013

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Description:

This statement presents highlights from two reports related to federal support of renewable and advanced energy technologies.

The first report discusses GAO’s broad review of federal wind-related initiatives. In summary, GAO identified 82 federal wind-related initiatives implemented by nine agencies in fiscal year 2011. Most of these initiatives supported deployment of wind facilities and, of these, GAO identified 7 that provided duplicative support–financial support from multiple initiatives to the same recipient for deployment of a single project. These 7 initiatives included tax expenditures, grants, loans, and loan guarantee programs and were implemented by the Departments of the Treasury, Energy (DOE), or Agriculture (USDA). In many cases, wind project developers combined the support of more than one Treasury initiative and, in some cases, received additional support from smaller DOE or USDA grant or loan guarantee programs. Of the 7 initiatives, those implemented by Treasury accounted for more than 95 percent of the federal financial support for wind in fiscal year 2011, based on available estimates from Treasury and the Joint Committee on Taxation. In addition to these 7 initiatives, GAO identified 3 other DOE or USDA initiatives that did not actually fund any wind projects in fiscal year 2011 but that could be combined with one or more other federal initiatives to provide duplicative support in the future based on the types of projects eligible for their support.

DOE and USDA have discretion—to the extent allowed by their statutory authority—over the projects they support, and Treasury supports projects based on the tax code’s eligibility criteria and generally does not have discretion to allocate support to projects. DOE and USDA have used their discretion to allocate support based on projects’ ability to meet initiative goals, such as reducing emissions or benefitting rural communities, as well as other criteria, such as financial and technical feasibility. According to agency officials and program guidance, DOE and USDA also consider applicant need for their initiatives’ support, in some cases. However, neither DOE nor USDA officials provided documentation that indicated how information they collected or examined about applicant need influenced their decisions on whether to provide support, or how much support to provide, under their initiatives for specific projects. As a result, the extent to which applicant need influenced agency decisions is unclear. Whether initiatives’ incremental support was always needed for wind projects to be built is also unclear. According to agency officials and financial professionals active in the wind energy industry, the incremental support provided by each initiative may be necessary, in many cases, for wind projects to be built. However, because agencies do not document assessments of projects’ need for support, it is sometimes unclear if the entire amount of federal support provided was necessary.

The second report discusses GAO’s review of the status of DOE’s efforts to use its remaining loan and loan guarantee authorities and remaining credit subsidy appropriations to support projects under its Title XVII Innovative Technology Loan Guarantee Program (LGP)and Advanced Technology Vehicles Manufacturing (ATVM) loan program. As of January 29, 2013, DOE was considering using $15.1 billion of the $34.8 billion in remaining loan guarantee authority for loan guarantees requested by 13 active 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 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.