Energy Dept. aims to give out stimulus loans by summer
Energy Secretary Steven Chu announces he is implementing changes in the department to more quickly distribute loans from the stimulus package.
WASHINGTON--Energy Secretary Steven Chu announced on Thursday a number of ways he will streamline the process by which the Energy Department distributes funding, with the goal of dispersing 70 percent of its funds from the American Recovery and Reinvestment Act by the end of 2010.
"We have undergone a detailed scrubbing of the process," he said. "What we've found is that the old process required too much paperwork and simply took too long. These are sweeping reforms in the way the Department of Energy does business."
The energy investments in the stimulus package intimately tie the reshaping of the energy sector to the country's economic recovery.
Chu called the significant investment "very farsighted."
To get the money out more quickly, Chu announced Thursday he is naming Matt Rogers as a senior adviser to implement the new department reforms. Rogers formerly served as a senior partner at McKinsey and worked with the energy industry for more than 20 years. He also served on the Obama transition team.
The changes Rogers will implement include rolling out appraisals of applications for loan guarantees, rather than waiting for the application deadline to evaluate them. Loan application forms will be simplified and the department will speed up loan underwriting by using outside partners.
With these changes in place, the department should be able to begin offering loan guarantees under its previous loan guarantee program by late April or early May, Chu said, though some recipients may have to secure their own share of the financing or meet other conditions before their applications are approved. With the same financing conditions, the department should be offering loan guarantees under the stimulus legislation by early summer, Chu said.
"The goal is to begin making these investments in months, not years," Chu said.
Among other things, the department also intends to establish a Web site to provide more assistance to applicants and add transparency to the process.
The department will also be working with outside industries to find good projects to finance.
"It'll be interesting to see what the market brings forward," Rogers said Thursday.
When President Obamathe American Recovery and Reinvestment Act on Tuesday, he said the bill should allow the country to double its use of renewable energy within three years.
Chu said he could not parse out specifically how much of that energy will come from which sources, but he said there are a few mature renewable sources that could help the country reach that goal, such as wind and photovoltaic energy.
"There are numerous wind projects that can go forward," he said. "The Bonneville Power Administration has (transmission) lines sited and those lines will connect to wind farms. This is something that can be done within this two-year period."
Chu said as the government tries to accelerate the use of renewable energies, it will also be exploring different methods of carbon capture and sequestration.
"Right now, to the best of my knowledge, it is not a slam dunk which technology is the right one," he said.
He also said he meets with White House climate czar Carol Browner and Environmental Protection Agency Administrator Lisa Jackson about once a week to make sure the Energy Department's interests do not conflict with the White House's climate change goals.
As the department works to develop the renewable energy sector, Chu said it is imperative it also fund basic science research.
"If you look at some of the wealth creation in the United States--the Internet, biotech--a lot of that was driven by companies that deeply believed in research like Bell Laboratory, IBM Labs," he said. "In the energy sector, you don't have that. What I see is the Department of Energy filling that vacuum."