Page 1 GAO-13-331R Status of DOE Loan Programs

United States Government Accountability Office

Washington, DC 20548

March 15, 2013

The Honorable Dianne Feinstein

Chairman

The Honorable Lamar Alexander

Ranking Member

Subcommittee on Energy and Water Development

Committee on Appropriations

United States Senate

The Honorable Rodney P. Frelinghuysen

Chairman

The Honorable Marcy Kaptur

Ranking Member

Subcommittee on Energy and Water Development,

and Related Agencies

Committee on Appropriations

House of Representatives

Subject: Department of Energy: Status of Loan Programs

The Department of Energy’s (DOE) Loan Guarantee Program (LGP) for innovative energy 

projects was established in Title XVII of the Energy Policy Act of 2005 to encourage early 

commercial use of new or significantly improved technologies in energy projects.1 The act—

specifically section 1703—originally authorized DOE to guarantee loans for projects that (1) 

use new or significantly improved technologies as compared with commercial technologies 

already in service in the United States and (2) avoid, reduce, or sequester emissions of air 

pollutants or man-made greenhouse gases.2 Subsequently, in December 2007, Congress 

enacted the Energy Independence and Security Act (EISA), which made the nation’s 

corporate average fuel economy standards for newly manufactured passenger vehicles 

more stringent by requiring significant increases in the fuel economy of the vehicles being 

sold in the United States by 2020. In addition, EISA established the Advanced Technology 

Vehicles Manufacturing (ATVM) loan program, which provides loans for projects to produce 

more fuel-efficient passenger vehicles and their components. 

DOE’s Loan Programs Office administers both programs, which when combined have about 

$51 billion in unused loan and loan guarantee authority and approximately $4.4 billion in 

 

1 Pub. L. No. 109-58, Title XVII (Aug. 8, 2005). 2 In February 2009, Congress passed the American Recovery and Reinvestment Act, which amended Title XVII 

by adding section 1705 as a temporary program for the rapid deployment of renewable energy and electric 

power transmission projects, as well as leading-edge biofuels projects. The authority to enter into loan 

guarantees under 1705 expired on September 30, 2011. Pub. L. No. 111-5 (Feb. 17, 2009).
Page 2 GAO-13-331R Status of DOE Loan Programs

unused credit subsidy appropriations.3 For the LGP, $34 billion in loan guarantee authority 

and $170 million in credit subsidy appropriations remain. For the ATVM loan program, $16.6 

billion in loan authority and $4.2 billion in credit subsidy appropriations remain. DOE has not 

closed on a loan or loan guarantee or conditionally committed to do so under either program 

since September 2011.4

We have an ongoing mandate under the 2007 Revised Continuing Appropriations 

Resolution to review DOE’s execution of the LGP and to report our findings to the House 

and Senate Committees on Appropriations. Because DOE is administering the LGP and 

ATVM programs through one Loan Programs Office, we included both programs in this 

review. This report formally transmits the enclosed briefing slides that we provided to your 

offices on February 15, 2013 (see encl. I). Our objectives for this report were to determine 

the status of DOE’s efforts to use the remaining loan and loan guarantee authorities and 

remaining credit subsidy appropriations for (1) the LGP and (2) the ATVM loan program, 

including selected applicant views on these efforts. 

To address these objectives, we reviewed the LGP’s and ATVM loan program’s legislative 

and regulatory histories, status of current and past applications to both programs, and 

remaining loan authorities and credit subsidy appropriations of both programs. We also 

reviewed reports on the LGP and ATVM loan program, including our prior work.5 To provide 

additional perspective and context, we interviewed DOE officials about their plans and 

schedule for making and guaranteeing additional loans and about the reliability of agencysupplied data.6 We also interviewed nine LGP applicants, as well as five ATVM loan 

program applicants and other auto manufacturers, about their views of and experience with 

the programs. We selected the LGP applicants based on the active status of their 

applications,7 ensuring representation from each sector. Because there are no active ATVM 

applications, we selected applicants and auto manufacturers based on their eligibility to 

apply, ensuring that we included current, former, and prospective applicants. 

We conducted this performance audit from June 2012 to March 2013 in accordance with 

generally accepted government auditing standards. Those standards require that we plan 

and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable 

basis for our findings and conclusions based on our audit objectives. We believe that the 

evidence obtained provides a reasonable basis for our findings and conclusions based on 

our audit objectives. 

In summary, as of January 29, 2013, DOE was considering using $15.1 billion of the $34.8 

billion in remaining loan guarantee authority for loan guarantees requested by 13 active LGP 

applications.8

 

3 Credit subsidy appropriations are to cover credit subsidy costs—that is, the government’s estimated net longterm cost, in present value terms, of direct or guaranteed loans over the entire period the loans are outstanding 

(not including administrative costs). 

 According to DOE officials, the agency planned to use all of the remaining 

4 A conditional commitment is a commitment by DOE to issue a loan guarantee if the applicant satisfies specific 

requirements. The Secretary of Energy has the discretion to cancel a conditional commitment at any time for any 

reason prior to the issuance of a loan guarantee.

5 GAO, Department of Energy: New Loan Guarantee Program Should Complete Activities Necessary for 

Effective and Accountable Program Management, GAO-08-750 (Washington, D.C.: July 7, 2008). GAO, 

Department of Energy: Further Actions Are Needed to Improve DOE’s Ability to Evaluate and Implement the 

Loan Guarantee Program, GAO-10-627 (Washington, D.C.: July 12, 2010). GAO, Department of Energy: 

Advanced Technology Vehicle Loan Program Implementation Is Under Way, but Enhanced Technical Oversight 

and Performance Measures Are Needed, GAO-11-145 (Washington, D.C.: Feb. 28, 2011). 6 Based on these interviews, we found the data sufficiently reliable for the purposes of our work. 7 Active applications are those that DOE is actively considering. In contrast, inactive applications are on hold for 

various reasons.

8 The remaining loan guarantee authority amount of $34.8 billion includes DOE’s estimate of $848 million in 

additional loan guarantees that can be supported by the $170 million in credit subsidy appropriations.
Page 3 GAO-13-331R Status of DOE Loan Programs 

$170 million in credit subsidy appropriations to support active applications for energy 

efficiency and renewable energy projects. DOE considered an additional 27 LGP 

applications requesting a total of $73 billion to be inactive. The loan guarantee authority and 

credit subsidy appropriations do not expire. 

In addition, as of January 29, 2013, DOE was not actively considering any applications for 

using the remaining $16.6 billion in loan authority or $4.2 billion in credit subsidy 

appropriations available under the ATVM loan program. DOE considered the seven ATVM 

loan program applications it has, requesting a total of $1.48 billion, to be inactive for reasons 

including insufficient equity or technology that is not ready. Most applicants and 

manufacturers we spoke with told us that, currently, the costs of participating outweigh the 

benefits. Although the ATVM loan program is accepting applications on an ongoing basis, 

according to DOE officials, DOE is not likely to use the remaining ATVM loan program 

authority given the current eligibility requirements. As with the LGP, the loan authority and 

credit subsidy appropriations for ATVM do not expire. See table 1 for more detailed 

information about the status of DOE’s efforts to use the remaining loan or loan guarantee 

authorities for the LGP and ATVM loan program. 

Table 1: Potential Use of Remaining Authorities, by Active Applications 

Dollars in billions 

Program/Technology category 

Remaining 

authority 

Active applications 

Difference in 

remaining 

authority and 

amount requested 

in active 

Number applications 

Amount 

requested 

LGP 

Energy efficiency and renewable 

energy 

$2.3 a 8 $2.0 $0.3

Nuclear generation $18.5 3 $8.3 $10.2 

Nuclear front-end $2.0 1c $2.0 $0.0 

Fossil energy $8.0 1 $2.8 $5.2 

Mixedb $4.0 0c

 $0.0 $4.0 

Total $34.8 13 $15.1 $19.7 

ATVM $16.6 0 $0.0 $16.6 

Source: GAO analysis of DOE data. 

a This amount represents the combined authority of $1.5 billion in loan guarantee authority and DOE’s estimate of $848 million 

in additional loan guarantees that can be supported by the $170 million in credit subsidy appropriations. b The mixed authority could be used for any of the loan guarantee categories. 

c

 DOE notified Congress that, in order to accommodate more than one project, it expected to use $2 billion of the mixed 

authority for nuclear front-end projects. A final decision regarding which authority would be used for a specific transaction

would only be made if and when the authority is obligated at closing. 

For additional information on the results of our work, see enclosure I, slides 13 through 24. 

We are making no recommendations in this report. 
Page 4 GAO-13-331R Status of DOE Loan Programs

Agency Comments

We provided a draft of this report to DOE for review and comment. DOE provided written 

comments, which are reproduced in enclosure II. In its written comments, DOE generally 

agreed with GAO’s findings. DOE also provided technical comments that were 

incorporated, as appropriate.

We are sending copies of this report to the Secretary of Energy, the appropriate 

congressional committees, and other interested parties. This report also is available at no 

charge on the GAO website at http://www.gao.gov. 

If you or your staff members have questions concerning this report, please contact me at 

(202) 512-3841 or ruscof@gao.gov . Contact points for our Offices of Congressional 

Relations and Public Affairs may be found on the last page of this report. Key contributors 

to this report were Karla Springer, Assistant Director; Marcia Carlsen; Lee Carroll; Cindy 

Gilbert; Ryan Gottschall; Cynthia Norris; Madhav Panwar; Lindsay Read; and Barbara 

Timmerman. 

Frank Rusco

Director

Natural Resources and Environment

Enclosures (2)
Page 5 GAO-13-331R Status of DOE Loan Programs

Enclosure I

Status of DOE Loan Programs

Briefing to Appropriations Committees

February 2013

For more information, contact Frank Rusco at (202) 512-3841 or ruscof@gao.gov Page 1
Page 6 GAO-13-331R Status of DOE Loan Programs

Introduction

• The Department of Energy’s (DOE) Loan Programs Office administers the Title 

XVII Innovative Technology Loan Guarantee Program (LGP) and Advanced 

Technology Vehicles Manufacturing (ATVM) loan program.

• The LGP, as authorized under Title XVII of the Energy Policy Act of 2005 

(EPACT), encourages early commercial use of new or significantly improved 

technologies in energy projects. Under LGP, DOE agrees to reimburse lenders, 

either the Federal Financing Bank or private lenders, for the guaranteed amount 

of loans if the borrowers default.

• The ATVM loan program, as authorized under section 136 of the Energy 

Independence and Security Act of 2007 (EISA), provides loans to support the 

development of advanced technology vehicles and associated components in the 

United States that would increase the fuel economy of U.S. passenger vehicles.

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Page 7 GAO-13-331R Status of DOE Loan Programs

Introduction (cont.)

• EPACT requires that the credit subsidy costs of loans and loan guarantees be 

paid for by either appropriations or the borrowers. Credit subsidy costs represent 

the estimated net long-term cost of extending or guaranteeing credit, in present 

value terms, over the entire period the loans are outstanding (not including 

administrative costs).

• As of January 2013, LGP and the ATVM loan program combined had about $51 

billion in unused loan and loan guarantee authority and approximately $4.4 billion 

in unused credit subsidy appropriations.

• For the LGP, $34 billion in loan guarantee authority and $170 million in credit 

subsidy appropriations remained. The LGP’s authorities are divided into four 

technology categories: energy efficiency and renewable energy (EERE), 

nuclear generation, nuclear front-end, 1 and fossil energy. There is also a 

mixed authority that may be used for projects in any of the four categories. 

• For the ATVM loan program, $16.6 billion in loan authority and $4.2 billion in 

credit subsidy appropriations remained. 

• DOE has not closed on a loan or loan guarantee or conditionally committed to do 

so under either program since September 2011. 1 Nuclear front-end projects are to accelerate deployment of new uranium enrichment capacity and distribution.

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Page 8 GAO-13-331R Status of DOE Loan Programs

Objectives

• This final briefing responds to our ongoing mandate in the 2007 Revised 

Continuing Appropriations Resolution that directs GAO to review DOE’s execution 

of the LGP and to report our findings to the House and Senate Committees on 

Appropriations. 

• Because DOE is administering the LGP and ATVM programs through one Loan 

Programs Office, we included both programs in this review.

• Our objectives for this review were to determine the status of DOE’s efforts to use 

the remaining loan or loan guarantee authorities and remaining credit subsidy 

appropriations for (1) the LGP and (2) the ATVM loan program, including selected 

applicant views on these efforts.

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Page 9 GAO-13-331R Status of DOE Loan Programs

Scope and Methodology

To do this work, we

• Reviewed the LGP’s and ATVM loan program’s legislative and regulatory 

histories, status of current and past applications to both programs, and remaining 

loan authorities and credit subsidy appropriations of both programs.

• Interviewed DOE officials about their plans and schedule for making and 

guaranteeing additional loans and about the reliability of agency-supplied data.2

• Interviewed nine LGP applicants, as well as five ATVM loan program applicants 

and other auto manufacturers, about their views of and experience with the 

programs to provide context to DOE’s plans and schedule. We selected the LGP 

applicants based on the active status of their applications,3 ensuring 

representation from each technology category. Because there are no active ATVM 

applications, we selected applicants and auto manufacturers based on their 

eligibility to apply, ensuring that we included current, former, and prospective 

applicants.

• Reviewed reports on the LGP and ATVM loan program, including our prior work. 2Based on these interviews, we found the data sufficiently reliable for the purposes of our work.

3Active applications are those that DOE is actively considering. In contrast, inactive applications are on hold for various reasons.

Page 5
Page 10 GAO-13-331R Status of DOE Loan Programs

Scope and Methodology (cont.)

• We conducted this performance audit from June 2012 to February 2013 in 

accordance with generally accepted government auditing standards. Those 

standards require that we plan and perform the audit to obtain sufficient, 

appropriate evidence to provide a reasonable basis for our findings and 

conclusions based on our audit objectives. We believe that the evidence obtained 

provides a reasonable basis for our findings and conclusions based on our audit 

objectives.

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Page 11 GAO-13-331R Status of DOE Loan Programs

Background: Title XVII Innovative Technology 

Loan Guarantee Program (LGP)

• The LGP has two components authorized under different laws:

• Section 1703 – Renewables or Efficient End-Use Technology Innovative 

Technology Loan Guarantee Program (1703): Section 1703 of EPACT 

authorizes DOE to provide loan guarantees for innovative clean energy 

projects in categories including renewable energy systems, energy efficiency, 

advanced nuclear facilities, advanced fossil energy technologies (including 

carbon sequestration), and various other types of projects.

• Section 1705 – Temporary Loan Guarantee Program (1705): Section 406 

of the American Recovery and Reinvestment Act of 2009 (Recovery Act) 

amended the LGP’s authorizing legislation by establishing section 1705 as a 

temporary program for the rapid deployment of renewable energy and electric 

power transmission projects, as well as leading-edge biofuels projects. The 

authority to enter into loan guarantees under 1705 expired on September 30, 

2011.

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Page 12 GAO-13-331R Status of DOE Loan Programs

Background: LGP 1703 Program 

• Under the 1703 program, DOE is authorized to guarantee approximately $34 

billion in loans. 

• Initially, Congress provided no appropriation to cover the credit subsidy costs of 

loan guarantees under section 1703, requiring all borrowers that receive a loan 

guarantee to pay a fee to cover the credit subsidy costs. 

• In April 2011, Congress appropriated $170 million to pay credit subsidy costs for 

EERE projects receiving loan guarantees under section 1703. Congress later 

provided that DOE may combine an appropriation and fees paid by the borrower 

to cover the credit subsidy cost of a guarantee, allowing DOE to potentially 

provide credit subsidy support to a larger number of EERE projects. 

• To date, DOE has not made a loan guarantee under the 1703 program. 

Page 8
Page 13 GAO-13-331R Status of DOE Loan Programs

Background: LGP 1705 Program

• The Recovery Act provided about $2.4 billion in appropriations for the 1705 

program to cover DOE’s credit subsidy costs for an estimated $18 billion in loan 

guarantees.4

• DOE made approximately $15 billion in loan guarantees for 28 projects under the 

1705 program, using nearly $1.9 billion in appropriations to cover credit subsidy 

costs.

• The remaining approximately $550 million in LGP Recovery Act appropriations 

were rescinded at the end of 2012, in accordance with the repayment provisions 

of section 1306 of the Dodd-Frank Wall Street Reform and Consumer Protection 

Act, except for $96 million for which the President waived the repayment 

provisions on December 28, 2012. DOE officials told us that they anticipate they 

will need the maintained funds to pay the credit subsidy costs of modifications that 

may be made to existing loan guarantees issued under section 1705.5

• Because authority to enter into loan guarantees under section 1705 expired, DOE 

cannot guarantee any additional loans under this program. 4 The Recovery Act initially appropriated nearly $6 billion to pay credit subsidy costs; however, Congress subsequently reduced this amount by 

transfer and rescission to fund other priorities.

5 Modification means a government action, such as a change in the terms of the loan contract or legislation that provides new collection tools, that 

was not anticipated in the original credit subsidy cost estimation. It does not include routine administrative workouts of troubled loans or loans in 

imminent default.

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Page 14 GAO-13-331R Status of DOE Loan Programs

Background: Advanced Technology Vehicles 

Manufacturing (ATVM) Loan Program 

• EISA authorized the ATVM loan program to make $25 billion in loans.

• The fiscal year 2009 continuing resolution provided the ATVM loan program with 

$7.5 billion in appropriations to cover credit subsidy costs. 

• DOE has made five loans worth $8.4 billion and used $ 3.3 billion in 

appropriations to cover credit subsidy costs.

• DOE closed on its most recent ATVM loan in March 2011.

Page 10
Page 15 GAO-13-331R Status of DOE Loan Programs

Background: General Review Process for LGP and 

ATVM Loan Program Applications

Page 11
Page 16 GAO-13-331R Status of DOE Loan Programs

Background: Remaining Loan Authorities and 

Appropriations

Technology category Loan guarantee authoritya Credit subsidy appropriations

Provided Remaining Provided Remaining

Energy efficiency and renewable energy $1.5 billionb $1.5 billionb $170 million $170 million

Nuclear generation $18.5 billion $18.5 billion

Nuclear front-end $2 billion $2 billion

Fossil energy $8 billion $8 billion

Mixed $4 billion $4 billion

LGP Total $34 billion $34 billion $170 millionc $170 millionc

Page 12

Loan authority Credit subsidy appropriations

Provided Remaining Provided Remaining

ATVM $25 billion $16.6 billion $7.5 billion $4.2 billion

Title XVII Innovative Technology Loan Guarantee Program - 1703

Advanced Technology Vehicles Manufacturing Loan Program

Source: GAO analysis of DOE information.

a Most of this authority was provided in the 2009 Appropriations Act which provided $47 billion for all eligible projects, of which $18.5 billion is to be for nuclear power facilities. The DOE 

implementation plan submitted to Congress in accordance with the Appropriations Act allocated the remainder of the authority among eligible technologies as follows: $18.5 billion to EERE 

(subsequently reduced by rescission); $8 billion to fossil; and $2 billion to nuclear front end.

b Most of this EERE authority was provided in the 2011 continuing resolution and is exclusively for energy efficiency and renewable energy projects. However, $317 million was carried over 

from 2009 and can be used for other 1703-eligible technologies (such as pollution-control equipment). c Assuming a 20% credit subsidy, DOE estimates that $848 million in additional loan guarantees can be supported by the $170 million in credit subsidy appropriations.
Page 17 GAO-13-331R Status of DOE Loan Programs

Summary of Findings

• As of January 29, 2013, DOE was actively considering using $15.1 billion in 

remaining loan guarantee authority. 

• DOE was considering 13 active applications—

• 4 applications (3 in nuclear generation and 1 in nuclear front-end 

categories) that have conditional commitments for a total of $10.3 billion. 

• 9 applications (8 in EERE and 1 in fossil energy categories) requesting a 

total of $4.8 billion that are in the due diligence stage.

• DOE received an additional 27 applications (in EERE, nuclear generation, 

and nuclear front-end categories) requesting a total of $73 billion that the 

agency considers to be inactive for various reasons—for example, DOE may 

have been waiting for additional information or project developments. 

• As of January 29, 2013, DOE had no applications under active consideration for 

ATVM program loans and had received 7 applications requesting a total of $1.48 

billion that it considers to be inactive.

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Page 18 GAO-13-331R Status of DOE Loan Programs

Dollars in billions

Program/Technology category Remaining 

authority

Active applications Difference in remaining authority and 

amount requested in active 

applications Number Amount requested 

LGP

Energy efficiency and renewable energy $2.3a 8 $2.0 $0.3

Nuclear generation $18.5 3 $8.3 $10.2 

Nuclear front-end 

$2.0 1c $2.0 $0.0 

Fossil energy $8.0 1 $2.8 $5.2 

Mixedb

$4.0 0c $0.0 $4.0 

Total

$34.8 13 $15.1 $19.7

ATVM

$16.6 0 $0.0 $16.6 

Page 14

Summary of Findings (cont.) 

Source: GAO analysis of DOE data.

a This amount represents the combined authority of $1.5 billion in loan guarantee authority and DOE’s estimate of $848 million in additional loan guarantees that can be supported 

by the $170 million in credit subsidy appropriations.

b The mixed authority could be used for any of the loan guarantee categories. 

c DOE notified Congress that, in order to accommodate more than one project, it expected to use $2 billion of the mixed authority for nuclear front-end projects. A final decision 

regarding which authority would be used for a specific transaction would only be made if and when the authority is obligated at closing.

Potential Use of Remaining Authorities, by Active Applications
Page 19 GAO-13-331R Status of DOE Loan Programs

Obj. 1: Efforts to Use Remaining Loan Guarantee 

Authority and Credit Subsidy Appropriations (EERE)

• DOE is actively reviewing in the due diligence stage eight applications requesting 

a total of $2.0 billion in loan guarantees. These eight applications include two 

biomass projects, one solar generation project, three solar manufacturing 

projects, and two wind generation projects. 

• DOE has received 18 other applications requesting a total of $7.1 billion in loan 

guarantees that the agency considers inactive.

• DOE’s remaining EERE authority is approximately $2.3 billion. 

• If all eight active applications receive loan guarantees for the requested amount, 

DOE would have approximately $0.3 billion in remaining EERE authority.

• According to DOE officials, the agency has told applicants to be prepared to pay 

fees to cover their projects’ full credit subsidy costs and that DOE would inform 

each applicant when making a conditional commitment if appropriations would be 

used to cover part or all of these costs.

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Page 20 GAO-13-331R Status of DOE Loan Programs

Obj. 1: Efforts to Use Remaining Loan 

Guarantee Authority (Nuclear Generation) 

• DOE has conditionally committed to provide three loan guarantees totaling $8.3 

billion for a project to construct two new nuclear reactors at Plant Vogtle in 

Georgia. According to agency officials, DOE is in the process of moving from the 

conditional commitments to closing on these loan guarantees.

• DOE has received eight other applications requesting a total of $63.9 billion in 

loan guarantees that the agency considers inactive. 

• DOE’s remaining nuclear generation authority is $18.5 billion.

• If all three conditional commitments receive loan guarantees for the requested 

amount, DOE would have $10.2 billion in remaining nuclear generation authority.

• DOE officials anticipate that this $10.2 billion would be enough authority to 

support one other nuclear generation project. 

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Page 21 GAO-13-331R Status of DOE Loan Programs

Obj. 1: Efforts to Use Remaining Loan 

Guarantee Authority (Nuclear Generation, cont.)

• The eight applications that DOE considers inactive are on hold for the following 

reasons:

• Four applicants, requesting a total of $43.6 billion, have not obtained a 

combined construction and operating license for their projects from the 

Nuclear Regulatory Commission (NRC), and DOE will not actively consider 

these applications until the applicants receive NRC licenses. DOE officials do 

not anticipate any licenses being issued by NRC earlier than 2015. 

• Two applicants have had their U.S. partners withdraw, leaving the applicants 

ineligible for licenses.

• Two applicants are not moving forward with a loan guarantee, have not 

withdrawn their applications, and are proceeding with their project. The 

applicants are providing project updates to DOE.

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Page 22 GAO-13-331R Status of DOE Loan Programs

Obj. 1: Efforts to Use Remaining Loan 

Guarantee Authority (Nuclear Front-End)

• DOE has conditionally committed to provide a $2 billion loan guarantee for the 

Eagle Rock project, a new uranium enrichment plant in Idaho. According to DOE 

officials, the applicant has postponed the project and is reevaluating its corporate 

strategy, which is delaying closing. 

• DOE has received one other nuclear front-end application requesting a $2 billion 

loan guarantee that the Loan Programs Office considers inactive. 

• DOE’s remaining nuclear front-end authority is $2 billion.

• If the conditional commitment receives a loan guarantee for the requested 

amount, DOE would have no remaining nuclear front-end authority.

• To accommodate more than one project, DOE notified Congress that it expected 

to use $2 billion of the $4 billion in mixed authority for nuclear front-end projects. 

DOE officials told us that although there have been internal discussions regarding 

which source of authority would be used for the Eagle Rock project, a final 

decision would be made only at closing. 

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Page 23 GAO-13-331R Status of DOE Loan Programs

Obj. 1: Efforts to Use Remaining Loan 

Guarantee Authority (Fossil Energy)

• DOE is actively reviewing in the due diligence stage one application requesting a 

$2.8 billion loan guarantee for a coal gasification project with carbon-capture 

components.

• DOE’s remaining fossil energy authority is $8 billion. 

• If the active application receives a loan guarantee for the requested amount, DOE 

would have $5.2 billion in remaining fossil energy authority.

• DOE officials said the agency is considering issuing a new solicitation for fossil 

energy applications. 

Page 19
Page 24 GAO-13-331R Status of DOE Loan Programs

Obj. 1: Efforts to Use Remaining Loan 

Guarantee Authority (Time Frames)

• According to DOE officials, as of January 29, 2013, the Loan Programs Office was 

not close enough to approving any of the nine applications in the due diligence 

stage to estimate when there could be additional conditional commitments. DOE 

officials would be able to estimate a conditional commitment time frame only 

when they have a credit approval package ready for management review, but 

such packages have not been prepared for any applications in the due diligence 

stage. 

• DOE officials would not comment on the anticipated dates for closing on loan 

guarantees for the four applicants that have conditional commitments, except to 

say that the applicants need to meet several conditions, and the parties need to 

negotiate the final closing documents.

• Six of the nine applicants with whom we spoke that had applications in the due 

diligence stage or who had received a conditional commitment hope to close on 

their loan guarantees sometime in the next year, and several said they believed 

they would close in the next 6 months. 

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Page 25 GAO-13-331R Status of DOE Loan Programs

Obj. 1: Efforts to Use Remaining Loan Guarantee 

Authority and Credit Subsidy Appropriations 

(Applicant Views)

• Applicants we interviewed were generally complimentary of DOE Loan Programs 

Office staff. Most of these applicants said they felt that staff were responsive and 

doing their best to move forward with loan guarantees.

• Five of the nine LGP applicants we spoke with said a loan guarantee is necessary to 

proceed with their projects. Three others said their projects could proceed without a 

guarantee at higher costs to ratepayers, and one applicant was uncertain.

• Applicants we spoke with also noted that challenges have led to uncertainty about the 

prospects of their applications. These challenges include aspects of DOE’s review 

process, limited information on credit subsidy costs, and the program’s negative 

public image.

• Aspects of DOE’s review process: Most applicants described challenges in 

DOE’s review process, including

• lengthy review time frames, 

• limited flexibility resulting from procedures and roles of multiple agencies, and

• the quantity of resources required of applicants.

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Page 26 GAO-13-331R Status of DOE Loan Programs

Obj. 1: Efforts to Use Remaining Loan Guarantee 

Authority and Credit Subsidy Appropriations 

(Applicant Views, cont.) • Limited information on credit subsidy costs: Some applicants told us that 

limited information from DOE about how much applicants will pay in fees to 

cover credit subsidy costs has made project planning difficult. 

• DOE does not inform LGP applicants of the fee that they will need to pay 

until the end of the process. Applicants receive an estimated range of the 

credit subsidy fee with their conditional commitment paperwork, but DOE 

has told applicants the final fee may fall outside of this estimate.

• Applicants generally continue to invest in their projects while waiting for 

DOE’s estimate, but the size of the final fee may determine whether a 

project is economical. Some applicants expressed concerns that they will 

have expended significant time and resources before finding out whether 

the fee to cover credit subsidy costs would make a loan guarantee 

uneconomical. 

• Negative public image: Some applicants noted that the Solyndra default and 

other problems have created a negative public image and political environment 

for the program, which has made its future less certain and DOE more 

cautious about closing on loan guarantees. 

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Page 27 GAO-13-331R Status of DOE Loan Programs

Obj. 2: Efforts to Use Remaining ATVM Loan Program 

Authority and Credit Subsidy Appropriations

• DOE had no applications under active consideration for the ATVM loan program. 

• DOE has received seven applications requesting a total of $1.48 billion that they 

consider inactive. 

• Two applications requesting a total of $0.31 billion are “substantially complete,” 

meaning ready for consideration. However, according to DOE officials, while 

an application may be substantially complete, a project may not be ready to 

proceed for a variety of reasons including insufficient project sponsor equity or 

the project technology’s readiness. 

• Five applications requesting a total of $1.17 billion are “not substantially 

complete,” meaning the applicant must provide additional information to DOE 

before the agency can make an eligibility determination.

• DOE’s remaining ATVM loan authority is $16.6 billion and remaining credit subsidy 

appropriations are $4.2 billion.

• The ATVM loan program is accepting applications on an ongoing basis, per 

procedures set forth in the ATVM Interim Final Rule.

• According to DOE officials, they are not likely to use all of the remaining ATVM loan 

program authority given the current eligibility requirements. 

Page 23
Page 28 GAO-13-331R Status of DOE Loan Programs

Obj. 2: Efforts to Use Remaining ATVM Loan Program Authority 

and Credit Subsidy Appropriations (Applicant and Auto 

Manufacturer Views)

• Most ATVM loan program applicants and other auto manufacturers we spoke with 

noted that there remains a need to promote advanced technology for increasing 

fuel economy; however, in many cases they said that, as the program is currently 

implemented by DOE, the costs of participating outweigh the benefits to their 

companies.

• Most applicants and manufacturers cited lengthy and burdensome application and 

review processes or restrictive loan and reporting requirements as challenges.

• Most applicants and manufacturers noted that public problems with the Solyndra

default and other DOE programs have also tarnished the ATVM loan program, 

contributing to the challenges highlighted above. They believed the negative 

publicity makes DOE more risk-averse or makes companies wary of being 

associated with government support. 

Page 24
Page 29 GAO-13-331R Status of DOE Loan Programs

Related GAO Products

• DOE Loan Guarantees: Further Actions Are Needed to Improve Tracking and 

Review of Applications. GAO-12-157. Washington, D.C.: March 12, 2012.

• Department of Energy: Advanced Technology Vehicle Loan Program 

Implementation Is Under Way, but Enhanced Technical Oversight and 

Performance Measures Are Needed. GAO-11-145. Washington, D.C.: February 

28, 2011.

• Department of Energy: Further Actions Are Needed to Improve DOE’s Ability to 

Evaluate and Implement the Loan Guarantee Program. GAO-10-627. 

Washington, D.C.: July 12, 2010.

• Department of Energy: New Loan Guarantee Program Should Complete Activities 

Necessary for Effective and Accountable Program Management. GAO-08-750. 

Washington, D.C.: July 7, 2008.

• Department of Energy: Observations on Actions to Implement the New Loan 

Guarantee Program for Innovative Technologies. GAO-07-798T. Washington, 

D.C.: April 24, 2007.

• The Department of Energy: Key Steps Needed to Help Ensure the Success of the 

New Loan Guarantee Program for Innovative Technologies by Better Managing 

Its Financial Risk. GAO-07-339R. Washington, D.C.: February 28, 2007.

Page 25
Page 30 GAO-13-331R Status of DOE Loan Programs

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