What GAO Found
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 Treasury, DOE, or 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.
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 LGP and ATVM loan program, as of January 29, 2013. DOE’s Loan Programs Office administers LGP and the ATVM loan program. LGP, under Title XVII of the Energy Policy Act of 2005, as amended (EPAct), encourages, among other things, early commercial use of new or significantly improved technologies in energy projects. Under LGP, DOE agrees to reimburse lenders–either the Federal Financing Bank or private lenders–for the guaranteed amount of loans if the borrowers default. EPAct requires that the credit subsidy costs of LGP loan guarantees be paid for by either appropriations or the borrowers. For certain categories of LGP loan guarantees, Congress has provided appropriations to cover credit subsidy costs. The ATVM loan program, as authorized under Section 136 of the Energy Independence and Security Act of 2007, provides loans to support development of advanced technology vehicles and associated components in the United States that would increase the fuel economy of U.S. passenger vehicles. The fiscal year 2009 continuing resolution provided the ATVM loan program with appropriations to cover credit subsidy costs of loans provided under the program. DOE has not closed on a loan or loan guarantee or conditionally committed to do so under either program since September 2011 and, as of January 2013, the programs combined had about $51 billion in unused loan and loan guarantee authority and approximately $4.4 billion in unused credit subsidy appropriations. For the LGP, $34 billion in loan guarantee authority and $170 million in credit subsidy appropriations remained. For the ATVM loan program, $16.6 billion in loan authority and $4.2 billion in credit subsidy appropriations remained.
In summary, GAO found that, 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 deemed an additional 27 LGP applications requesting a total of $73 billion to be inactive for various reasons–for example, DOE may have been waiting for additional information or project developments. Nonetheless, the loan guarantee authority and credit subsidy appropriations do not expire.
Why GAO Did This Study
This testimony discusses federal support for renewable and advanced energy technologies. Americans’ daily lives, as well as the economic productivity of the United States, depend on the availability of energy, the majority of which comes from fossil fuels. However, faced with concerns over the nation’s reliance on imported oil, volatile energy costs, and greenhouse gas emissions, federal policymakers have increased support for deployment of renewable and advanced energy technologies to help meet our nation’s energy needs. Federal agencies including the Departments of Agriculture (USDA), Energy (DOE), and the Treasury, among others, provide support for these technologies through tax expenditures, grants, loans, and loan guarantees. This support helps finance production of electricity from wind and solar farms, manufacturing of electric and hybrid vehicles, and construction of advanced nuclear power plants, among other things. Energy produced from nonfossil fuel sources has increased over the last several decades, growing to about 22 percent of total U.S. energy production in 2012, according to projections by DOE’s Energy Information Administration, an independent statistical and analytical agency. At the same time, the increase in federal support for renewable and advanced energy technologies and the involvement of multiple agencies in supporting such technologies have raised questions about the effectiveness of this support. In the current fiscally constrained environment, it is especially important to allocate scarce government resources where they can be most effective. GAO has issued a number of reports related to federal support of renewable and advanced energy technologies including, most recently, the following two reports:
(1) a broad review of federal initiatives that promote wind energy, including the extent to which initiatives may provide duplicative support and the extent to which agencies assess applicant need for the initiatives’ support, and
(2) a review of the status of DOE’s efforts to use its loan and loan guarantee authorities and remaining credit subsidy appropriations to support projects under its Title XVII Innovative Technology Loan Guarantee Program (LGP), which guarantees loans for projects that, among other things, use new or significantly improved technologies, and Advanced Technology Vehicles Manufacturing (ATVM) loan program, which provides loans for projects to produce more fuel-efficient passenger vehicles and their components.
This statement presents highlights from these two reports.