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DOE Issues Proposed Rules for Clean Energy Loan Guarantees
DOE issued proposed rules on May 10th for its Loan Guarantee program, which will help spur investment in projects that employ new, clean energy technologies. By providing the full faith and credit of the U.S. government, loan guarantees will enable DOE to share some of the financial risks of projects that employ new technologies and that avoid, reduce, or sequester air pollutants and greenhouse gases. Projects must employ new or significantly improved technologies as compared to commercial technologies in service in the United States at the time the loan guarantee agreement is executed. Under the Fiscal Year (FY) 2007 Continuing Resolution, Congress provided DOE with authority to issue guarantees for up to $4 billion in loans.
DOE seeks a broad portfolio of large and small projects from a wide variety of technologies. DOE requested guarantees for up to $9 billion in loans in its FY 2008 budget request, including $4 billion in loans for projects that promote biofuels and clean transportation fuels and $1 billion in loans for projects using new technologies for electric transmission facilities or renewable power generation systems. Projects seeking loan guarantees will undergo the disciplined and rigorous reviews necessary to take proper account of the potential risks of a project. Ultimately, the issuance of the loan guarantees will depend on the merits and benefits of particular project proposals and their compliance with statutory and regulatory requirements. The DOE's Notice of Proposed Rulemaking (NOPR) will be open to public comment for 45 days. See the DOE press release and the NOPR, as published in the May 16th edition of the Federal Register.