DOE to Expedite Disbursement of Funds Received via Stimulus Act
February 25, 2009
President Barack Obama discussed the American Recovery and Reinvestment Act with Energy Secretary Steven Chu during a recent visit to DOE.
Energy Secretary Steven Chu has announced a sweeping restructuring of DOE's processes for issuing direct loans, loan guarantees, and other funds to expedite the disbursement of the DOE funds received via the American Recovery and Reinvestment Act (ARRA). DOE will streamline and simplify loan application forms and other paperwork and will begin reviewing applications as they are received, rather than waiting until an application deadline. DOE will also add additional staff and resources to process the applications, allowing the agency to begin offering loan guarantees under the existing DOE Loan Guarantee Program by late April or early May. DOE will begin offering loan guarantees established by the ARRA by early summer, with plans to disburse 70% of the ARRA funds by the end of 2010.
DOE is also taking several actions to make the direct loans and loan guarantees more inviting. To reduce the up-front costs of the loans, DOE will offer applicants the opportunity to pay the fees at closing and will also restructure credit subsidies so that they are paid over the life of the loan. DOE will also draw on outside partners to accelerate loan underwriting. To make the whole process work well, the agency will work with industry to attract good projects into the loan guarantee program and will help applicants navigate the application process. While most of the changes are within the Secretary Chu's authority, some will require the approval of Congress, and DOE will work quickly to obtain the necessary statutory changes. DOE will also establish a Web site to increase transparency in both the process and the results. The Obama administration has also established the Recovery.gov Web site to track the overall spending of the ARRA funds. See the DOE press release.
DOE's Bonneville Power Administration (BPA) is already charging ahead with a major infrastructure project, thanks to the ARRA. The economic stimulus act gave BPA an additional $3.25 billion in borrowing authority from the U.S. Treasury, allowing the organization to build a major new transmission project: a 500-kilovolt transmission line that will carry more than 870 megawatts of power, providing service to more than 700 megawatts of new wind power capacity. Work on the McNary-John Day transmission project will begin this spring, and at its peak, the construction project will support 700 jobs. See the BPA press release.