Bailout Watch 73: Regulate This

Since the $25b bailout is a done deal, it’s tempting to think of the “debate” as a fait accompli. Not so. The Department of Energy (DOE) still has to meet with lobbyists study the bill and write-up the regs. Although RF reckons the DOE won’t be rushed (that much), Motown’s white hot for the green, encouraging bailout backers to fire-off warning salvos even before the President’s signature clears the cash. As Green Car Congress reports, Senate Energy & Natural Resources Committee chair Jeff Bingaman (D-NM) is pre-threatening his pals at the DOE.

I have been told there may be some confusion about the terms of the loans as the provision creating the loan program references the “activities” that are the subject of a grant program also authorized in the same section of EISA. The grant program is limited to 30 percent of the costs of a facility. This is a fairly typical cost share for grant programs. Some have raised a question as to whether this 30 percent cap should also apply to the loan program. That is not the way I read the language of the law and was certainly not our intent in writing the provision.

Moreover, I would argue that it would dramatically limit the effectiveness of the program as it would require companies to go to tight credit markets for 70 percent of their financing, precisely the problem we were seeking to remedy with the creation of the loan program. While I don’t expect the Department of Energy to take this limited view of the program, I wanted to go on record here to help alleviate any confusion that may exist. I look forward to working with the Department to aid them in getting this program up and running.