Friday, February 20, 2009

Secretary Chu Expedites Funding for New Energy Economy

WASHINGTON, DC, February 19, 2009 (ENS) - Two days after President Barack Obama signed the American Recovery and Reinvestment Act into law, Energy Secretary Steven Chu announced a sweeping reorganization of the Energy Department's dispersal of direct loans, loan guarantees and funding contained in the new recovery legislation.

The goal of the restructuring is to expedite disbursement of money to begin investments in a new energy economy that will put Americans back to work and create millions of new jobs.

"These changes will bring a new urgency to investments that will put Americans back to work, reduce our dangerous dependence on foreign oil, and improve the environment," Secretary Chu told an audience of energy professionals and journalists at a Platts Energy Podium event in Washington.

"We need to start this work in a matter of months, not years, while insisting on the highest standard of accountability," he said.

By cutting paperwork, processing applications on a rolling basis, and drawing on lessons from the private sector and other agencies, the Department of Energy will be in a position to begin offering loan guarantees under the department's previous loan guarantee program by late April or early May, the secretary said.

The department will begin offering loan guarantees under the new stimulus legislation by early summer, Chu said.

These offers may still require recipients to secure their own share of the financing or meet other conditions prior to closing, but the DOE will have completed its review.

Under the $787 billion American Recovery and Reinvestment Act, the Energy Department will issue $32.7 billion in grants and another $6 billion in loan guarantees for alternative and advanced energy technologies, said Matt Rogers, an adviser named to lead the department's efforts to spend these funds.

Rogers, formerly a senior partner of McKinsey and Company, has more than 20 years of experience in working with the energy industry and has done extensive work on the economics of addressing the global climate crisis.

Rogers served the Obama Presidential Transition Team in a special effort to develop opportunities to reduce the cost and increase the use of renewable energy in federal energy procurement.

Secretary Chu said he plans to disperse 70 percent of the investment from the stimulus package by the end of next year.

He said the DOE will work with the industry to attract good projects into the loan guarantee program and help applicants navigate the process. A new website will provide increased transparency in both process and results.

Secretary Chu was confirmed by the Senate in January as the nation's 12th energy secretary, after having served as director of DOE's Lawrence Berkeley National Laboratory in California. Co-winner of the Nobel Prize for Physics in 1997, Chu has devoted his recent career to the search for new solutions to energy challenges and limiting global climate change.

Since being sworn in, Chu has been personally reviewing the Energy Department's process for issuing direct loans, loan guarantees and other funding to make it faster, simpler and more accountable.

The secretary said the changes he announced today will affect the loan guarantee program established by the Energy Policy Act of 2005 and the Advanced Technology Vehicles Manufacturing Loan Program in addition to funds supplied by the new economic stimulus package.

Based on detailed analysis of the programs, Secretary Chu said he is confident the changes will not introduce additional risk to the loan process.

Most of these changes are within the authority of the secretary of energy to make in consultation with the director of the Office of Management and Budget. Chu said a few will require statutory changes, and the department will move quickly to work with the House and Senate to make the necessary adjustments.

See the original article here

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