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  • lewis_whokeyser lewis_whokeyser Jun 18, 2013 8:09 AM Flag

    New Energy secretary defends loan program

    Energy Secretary Ernest Moniz defended the controversial Department of Energy loan program that has cost taxpayers billions on Monday.

    Moniz said at the Energy Information Administration conference that the administration had no intention of transitioning the loan program into an independent and more accountable program.

    “Frankly, the Department of Energy has built up a very, very professional organization that is getting very good marks in terms of due diligence,” he said when asked if spinning off the program would increase transparency. “The metrics of failure are what people like to focus on … [but] this looks like a healthy portfolio.”

    The loan program has come under fire after several high profile solar companies, including Solyndra and First Solar, declared bankruptcy, leading to multi-billion dollar losses for taxpayers. Critics of the program have pointed out that many of the loan guarantees were granted to politically connected individuals and Democratic campaign donors.

    Moniz told the audience that the loan program has stayed below a 10 percent failure rate that congress set as a benchmark for the program. The program has also sparked technological innovation in the automotive sector through DOE loan guarantees and the bailout.

    He pointed to the DOE’s loan to Tesla Motors, which is led by Democracy Alliance member and major Obama supporter Elon Musk, as one of the program’s success stories. Musk paid back a $465 million DOE loan after raising $1 billion from private investors in May.

    However, other conference speakers said reforming the tax code could do more for innovation and prosperity than any tax break or loan guarantee.

    Thomas Fanning, president and CEO of Southern Company, an electricity company, said the administration must “allow us to get the government out of picking winners and losers.”

    “We need to simplify tax code,” he said. “We are willing to forgo all forward looking tax benefits … in exchange for 25% fixed rate over time"

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