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Sen. Hatch pressures feds for answers on stimulus program for green energy

David Williams on June 21, 2016


(This article was first published in The Hill on June 17, 2016)

Remember Solyndra?

That was the Silicon Valley-based, taxpayer-funded, green energy boondoggle that even President Obama won’t defend in public. The solar panel manufacturer received a $535 million loan guarantee from the U.S. Energy Department under Obama’s 2009 economic stimulus package. But less than two years later in the summer of 2011, Solyndra filed for Chapter 11 bankruptcy leaving U.S. taxpayers on the hook. In a press conference, Obama sought to explain away  Solyndra as the result of bipartisan policy efforts that predated his presidency.

Let’s all agree that neither party is pristine on the question of taxpayer protection and sound energy policy, but let’s look at the facts. There are two loan guarantee programs that benefit renewable energy companies. The first was folded withinSection 1703 of the Energy Policy Act of 2005 under President Bush. The second was created as part of Obama’s stimulus bill officially titled: the American Recovery and Reinvestment Act of 2009. Obama’s bill amended the 2005 energy bill to create section 1705 for “commercially viable technologies.” While Solyndra initially applied for loans under Section 1703, taxpayer funding for the now defunct solar panel manufacturer came from the stimulus package, which liberalized and loosened lending standards.

But let’s assume Obama is correct to say both parties are culpable. The question then becomes who is standing up now in the aftermath of Solyndra to scrutinize ongoing green energy schemes that still receive taxpayer funding while holding government agencies accountable.  The answer is Sen. Orin Hatch (R-Utah).

Earlier this month, Sen. Hatch did his due diligence as chairman of the Senate Finance Committee by applying all the right pressure points against federal officials who are charged with safeguarding the public interest.

Hatch sent letters to Department of Treasury, the Internal Revenue Service (IRS) and the Treasury Inspector General for Tax Administration (TIGTA) that asked several probing questions. The Utah Republican also set a firm deadline of June 30 to receive substantive answers from those agencies. That’s how you have to play it with recalcitrant federal bureaucrats.

Specifically, Hatch asked for the agencies to provide information detailing the use and administration of cash grants and energy tax credits connected with Section 1603 of the stimulus package, which has awarded about $25 million in cash grants. Hatch is no Johnny-come-lately when it comes to asking hard questions about the use of stimulus funds. Back in March, he called upon both the Treasury Department and the IRS to come clean on the safeguards and coordination strategies the agencies had put in place to review and award Section 1603 grants.

“Congress has an obligation to conduct rigorous oversight of how the Executive Branch spends taxpayer dollars,” Hatch said in a press release. “These programs have directed billions of dollars toward green energy projects, and taxpayers deserve nothing less than full transparency and accountability from the Administration.  I expect full cooperation from the agencies involved in administering this multibillion dollar grant program as we seek answers into how the funds were awarded.”

Hatch opens his letters to the Treasury and the IRS officials by reminding them of his previous correspondence in March and then asks them to spell out what measures they have taken to protect taxpayer interests.

In his letter to Treasury, Hatch references an October 2010 memorandum addressed to Obama and other administration figures that expresses concern over “double-dipping” and a certain lack of “skin in the game” on the part of recipients of overlapping renewable energy subsidies, including the Section 1603 program and Department of Energy administered Sections 1703 and 1705 energy loan guarantee programs.

Hatch then rolls out a series of questions for Treasury that leave little wiggle room in anticipation of the June 30 deadline. They are in part as follows:

“What actions, if any, does the Department take to authenticate claims on Section 1603 program participant annual performance reports?”

“Please provide a list of the 177 Section 1603 grant recipients who have not submitted annual reports for 981 projects as of the end of March of this year. Please include the company name, property or facility name, award amount, award date, and status of collection proceedings at a minimum.”

“Is the Department taking any actions to monitor the financial stability of energy companies who receive taxpayer assistance through programs such as the Section 1603 grant program?”

In his letter to the IRS, Hatch asks the tax agency what verification process it uses for tax returns claiming the energy tax credit. He also asks for IRS officials to provide his committee with a briefing based on the questions raised in his letter. Since the IRS declined to create “an indicator on taxpayer accounts receiving Section 1603 cash grants” consistent with an earlier TIGTA recommendation, Hatch asks the Inspector General to intensify his oversight efforts.

One suggestion Hatch has for TIGTA is for it to:

“Examine the methods of property valuation used by taxpayers claiming the Section 1603 cash grant, including methods of measuring the cost basis of the property, the role of tax equity investors, and the use of independent accountants for properties with a cost basis of more than $500,000.”

While Hatch does a laudable job of probing into the cost overruns and multiple failures of green energy initiatives, there is one question handing behind all the letters that needs to be asked:

Taxpayers shouldn't be subsidizing unworkable green energy projects in the first place. The opportunity here is to reject the very premise of Solyndra-type government programs that can’t stand on their own two feet in the marketplace.



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