The U.S. Department of Energy (DOE) Inspector General, Teri Donaldson, delivered a stern warning to the Senate Energy and Natural Resources Committee regarding the Biden administration’s handling of a massive $400 billion green energy loan program, Fox News Digital reports.
Donaldson expressed concern over the significant risks associated with the current structure of the program and the potential for federal green energy awards to be granted to entities with undisclosed foreign entanglements.
Donaldson’s remarks, delivered during her testimony, highlighted the challenges posed by the DOE’s substantial green energy loan program. She emphasized the unprecedented magnitude of taxpayer funds involved and the complexity of the program.
“You have massive amounts of money moving quickly,” Donaldson stated, underscoring the complexity of managing such a vast amount of federal funds.
She also raised concerns about the risk of funding entities with foreign ownership or control and noted the need for rigorous vetting to ensure that American funds do not inadvertently benefit adversarial foreign interests.
Regarding vetting procedures, she expressed apprehension about the Department’s current practices, citing the recent establishment of a vetting center within the department. Donaldson pointed out that this vetting center is still in its infancy, with just three employees and no written procedures. She highlighted the absence of clear criteria for selecting projects to be vetted and the need for significant improvements in this area.
The Inflation Reduction Act (IRA), signed into law by President Biden in August 2022, greatly expanded the DOE Loan Programs Office’s (LPO) budget and loan authority. This expansion has given the LPO authority over loans and loan guarantees exceeding $400 billion, primarily through the $250 billion Energy Infrastructure Reinvestment Program/Innovative Technology Loan Guarantee designed to support green energy projects.
Donaldson’s data revealed that the IRA alone increased the LPO’s loan authority by $350 billion, substantially contributing to the program’s size and complexity.
The inspector general highlighted the accelerated pace at which Congress mandated the LPO to find and fund projects, creating an unprecedented level of financing. She noted that $290 billion in loan guarantees is set to expire over the next three years, which equates to roughly $8 billion per month. Such a financing pace is unprecedented in the department’s history, she warned.
Donaldson also underscored the unique nature of many projects funded through this program. They often promote innovation by supporting projects that private equity investors may not find acceptable, making them less palatable to the markets.
The inspector general’s warning follows a joint report published by Sen. John Barrasso and Rep. Cathy McMorris Rodgers, both Republicans, who raised concerns about the IRA. The report outlined multiple issues with the legislation, including increased national debt, potential conflicts of interest, and benefits to the Chinese industry.
