Our Biggest Delegation to D.C. Yet was a Successful Slew of Meetings, Events, and Gatherings

March was a busy month for the LABC. Following an informative, standing-room only, breakfast forum we held at the Regency Club on March 2nd, LABC hosted a trip to Washington DC from March 15th to the 17th. In attendance were a group of 27 LABC members that came to the capital as part of a larger delegation of over 200 Southern California business leaders, lawyers, and elected officials, to take part in Access Washington, DC. The group participated in a number of important policy discussions and briefings with elected officials on issues ranging from energy and environment to housing and healthcare.

On the morning of our second day, LABC met with Melanie Nakagawa of John Kerry’s staff where we discussed the future of Cap and Trade and Los Angeles’ priorities with regards to energy policy. We also had a face-to-face meeting with Senator Bernard Sanders of Vermont, who has proposed new legislation that if passed would put 10 million solar panels on 10 million roofs across the country. That afternoon, we hosted a luncheon at the Caucus Room restaraunt with Jonathan Silver, Executive Director of the Department of Energy’s Loan Guarantee Program (see Q & A below).

The Executive Director of the Dept. of Energy’s Loan Program on Federal Incentives for Energy Projects

While in D.C., the LABC delegation met with Jonathan Silver, the Executive Director of the US Department of Energy’s Loan Guarantee Program. Silver oversees the approval of large-scale energy projects that receive federal funding. He spoke to our delegation at a LABC luncheon at the Caucus Room restaurant, and met with us in a meeting at the DOE offices the following day.

The mission of the LGPO is to accelerate commercial use of new or improved clean energy technologies that will help sustain economic growth, yield environmental benefits, and produce a more stable and secure energy supply. Title XVII of the Energy Policy Act of 2005 (EPAct) authorized the Secretary of Energy to make loan guarantees for projects that avoid, reduce, or sequester air pollutants or anthropogenic emissions of greenhouse gases. Projects can include renewable energy systems, advanced nuclear facilities, coal gasification, carbon sequestration, energy efficiency, and many others.

The American Recovery and Reinvestment Act of 2009 (ARRA) created a new loan guarantee program under Title XVII of the Energy Policy Act of 2005. Under this program designed to address the current economic conditions of the nation, certain renewable energy systems, electric power transmission systems and leading edge biofuels projects that commence construction no later than September 30, 2011, will receive assistance with Credit Subsidy Costs.

The Loan Programs Office taps the Department’s own significant resources in energy technology development to assist us in performing independent technical evaluations of applications during our due diligence process. These include Office of Nuclear Energy and the Idaho National Energy Laboratory regarding nuclear projects.

The Office of Fossil Energy and National Energy Technology Laboratories support consideration of advanced fossil projects. The Loan Program Office relies on the Office of Energy Efficiency and Renewable Energy and National Renewable Energy Laboratory when considering a range of project including industrial energy efficiency, solar energy, alternative fuel vehicles, biomass, and wind. We call on DOE’s Office of Electricity Delivery and Energy Reliability when evaluating electricity delivery and energy reliability projects.

The Loan Programs Office has offered conditional commitments for loan guarantees to two solar projects totaling almost $2 billion.

In September 2009, we first finalized a loan guarantee for $535 million with Solyndra, a photovoltaic solar panel manufacturing company. The Project will introduce into full commercial operation a new and highly innovative process for manufacturing a breakthrough design for thin-film photovoltaic panels. Solyndra’s panels will be primarily used in a fast-growing niche market (large flat rooftops) that is ill-suited for traditional silicon panels.

On February 22, 2010, the Department of Energy and BrightSource entered into conditional commitment for $1.377 billion in loan guarantees to support the construction and start-up of three concentrated solar power plants. The plants will generate approximately 400 megawatts (MW) of electricity using the company’s innovative technology. This project would nearly double the existing generation capacity of this type of renewable energy in the US. The Department believes that BrightSource’s project represents an opportunity to bring a proven, innovative solar thermal technology to commercial scale.

The Advanced Energy Manufacturing Tax Credit Program and the Section 1603 cash grant program for solar power generation projects make the development of these projects much more attractive to project developers. Without these cash grants and tax credits many of these projects would not be financially feasible for the developers. This could curtail future development of these technologies. These incentives will help build a robust, high technology, US manufacturing capacity to supply clean energy projects with US made parts and equipment. They can provide a critically important inducement for manufacturers to begin mass production and marketing of innovative energy-saving technologies.

Applicants should go to the website: http://www.lgprogram.energy.gov.

The Loan Programs Office has two open solicitations. The first Energy Efficiency Renewable Energy and Advanced Transmission and Distribution Technologies (Hybrid) Solicitation. This solicitation’s remaining Part I and Part II rounds end in December 2010 or until loan guarantee authority is exhausted. Project sponsors apply directly to DOE.

The second solicitation targets Commercial Technology Renewable Energy Generations projects under the Financial Institution Partnership Program or FIPP. The Recovery Act made $750 million in funding to accelerate conventional renewable energy generation projects which could support as much as $4 to $8 billion in lending. Proposed borrowers and project sponsors do not apply directly to DOE, but instead, work with financial institutions satisfying the qualifications for an eligible lender which may apply directly to DOE to access a loan guarantee.

Significant review factors include: Technical Relevance and Merit; Applicant Capabilities, Technical Approach and Work Plan; Environmental Benefits; Creditworthiness; Construction Factors; and Legal and Regulatory Factors.

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Energy and Environment Committee Meeting Thursday, May 27

5:00 – 6:30 p.m.

Arden Realty

LABC Sustainability Series: Solar Power Potential and Cost for Greater LA

Thursday, July 1, 2010
Location: TBD
Featuring:
The Release of the LABC/UCLA Feed-in Tariff Study

+ Water resource planning projects may fall under the Superfund, which is an environmental program established in the 1980s that aims to fund the transformation of “abandoned hazardous waste sites” into productive sites. To learn more about how the Superfund works, click here.