News Media Contact(s) : Megan Barnett, (202) 586-4940 For Immediate Release October 4, 2007 

### DOE Announces Final Rule fo r Loan Guarantee Program Invites 16 Pre-Applicants to Submit Applications for Federal Support of Innovative Clean Energy Projects WASHINGTON, DC – Secretary of Energy Samuel W. Bodm an today announced that the Department of Energy (DOE) has issued the final regulations fo r the loan guarantee progr am authorized by Title XVII of the Energy Policy Act of 2005 (EPAct). DO E’s action today will pave the way for federal support of clean energy proj ects using innovative technologies and wi ll spur further investment in these advanced energy technologies. DOE also today invited 16 project sp onsors, who submitted pr e-applications last Fall, to submit full applications for loan guarantees. These projects include advanced technologies involving the uses of biomass, fossil energy, solar, industrial energy effici ency, electricity delivery and energy reliability, hydrogen, and alternative fuel vehicles. Projects suppor ted by loan guarantees will help fulfill President Bush’s goal of reducing ou r reliance on imported sources of ener gy by diversifying our nation’s energy mix and increasing energy efficiency. “Loan guarantees aim to stimulate investment and commercialization of clean energy technologies to reduce our Nation’s reliance on fore ign sources of energy,” Secretary Bodman said. “Finalizing this regulation for the Department’s Loan Guarantee program puts Americans one step closer to being able to use new and novel sources of en ergy on a mass scale to reduce emissions and allow for vigorous economic growth and increased energy security.” The final regulation provide s that the Department may issue guaran tees for up to 100% of the amount of a loan, subject to the EPAct limitation that DOE may not guarantee a debt instrument for more than 80% of the total cost of an eligible project. Under the fi nal rule, if DOE issues a gu arantee for 100% of a debt instrument, the loan must be issued and funded by the Treasury Department’s Federal Financing Bank. While Congress must provide authority in an appr opriations act for the loan guarantees that the Department will issue, DOE’s inte nt is to only issue lo an guarantees if borrowers and project sponsors p ay the “credit subsidy cost” for an y loan guarantee they receive. Therefore, DOE does not plan to use taxpayer funds to pay for the credit subsidy costs of these loan guarantees. The final regulation also pr ovides for the following:

z The Title XVII loan guarantee program will be implemented through a series of solicitations. The solicitations may target specific te chnology areas or be general;

z Eligible projects must employ ne w or significantly improved tec hnologies that avoid, reduce or sequester air pollutants or an thropogenic emissions of greenhouse gases as compared to commercial technologies in service in the United States at the time the loan guarantee agreement is executed; Pa g e 1 of 4 U.S. De p artment of Ener gy

4/9/2009 http ://www.ener gy . g ov/ p rint/5568.htmz The guaranteed portion of a partia lly guaranteed loan may be separated from or "stripped" from the non-guaranteed portion, except in cases where the guarantee exceeds 90 % of the loan amount;

z In the event of a loan default, DOE will have a superior lien on all proj ect assets pledged as collateral for the guaranteed loan; however, the final rule allows for the possibility in a default situation that lenders and holders of the non-guaranteed debt coul d share proportionately with the Department in proceeds from th e sale of project assets pledge d as collateral. A pari passu structure will not be permitted to override the De partment’s superior rightto project assets;

z The Secretary of Energy mu st determine that there is a “reason able prospect” of repayment of the guaranteed debt before a loan guarantee may be issued;

z DOE must charge and collect fees sufficient to cover applicable administrative expenses;

z Borrower–paid Credit Subsidy Costs and administr ative fees paid to DOE may not be included within total project costs for the purposes of de termining the amount of guarantees that DOE can issue for a project;

z A project’s receipt of other govern mental assistance does not disquali fy a project from receiving a Title XVII loan guarantee; however, when evaluati ng a project’s application for a Title XVII loan guarantee, DOE will consider the extent to wh ich a project will rece ive other governmental assistance, (e.g., grants, tax cred its, other loan guarantees);

z The borrower must have a significan t equity stake in a project, and proceeds from guaranteed or non-guaranteed debt, and the value of government gran ts and other assistance, will not be counted as “equity.” The final rule is the culmination of a public rulemaking process, whic h began with a Notice of Proposed Rulemaking published May 16, 2007. DOE reviewed and carefully considered all comments it received on the proposed rule. Congress currently is considering the Department’s Fiscal Year (F Y) 2008 Budget request for $9 billion in loan guarantee authority and $8.4 mil lion to run the Loan Guarantee of fice. Both of these actions are important for the successful execution of this program . DOE’s issuance of a dditional loan guarantee p rogram solicitations is dependenton receiving adequate additional au thorization from the Congress and funding for the operation of its Loan Guarantee program office. Today’s announcements build on months of action by DO E to implement its loan guarantee program. In August 2006, DOE issued a solicitation i nviting pre–applications for up to $2 billion in loan guarantees. By the December 31, 2006 deadline for this solic itation, DOE received 143 pre– applications requesting more than $27 billion in loan guarantee protection (fo r project costs estimated at more than $51 billion). The 16 pre-applicants invited today to submit full loan guarantee appl ications for review must inform DOE by October 30, 2007 if they plan to submit a full application. The applications received will undergo disciplined and rigorous reviews, necessary to take proper account of the potential risks of a p roject. The full application review will be subject to the final regulations issu ed today. The decision to issue loan guarantees will depend on the merits and be nefits of particular pr oject proposals and their compliance with statutory and regulatory requirements. The pre-applicants not se lected to submit full applications from this solicitation can reapply for future solicitations, for which their project is eligible. The following is a summary of th e 16 projects and sponsors invited to submit full applications: ADVANCED FOSSIL ENERGY PROJECTS Mesaba Energy Project (MEP-I, LL C): Integrated Gasification Combined Cycle (IGCC) Plant Minnesota is the proposed location for this project, which plans to build a state- of-the-art IGCC plant Pa g e 2 of 4 U.S. De p artment of Ener gy

4/9/2009 http ://www.ener gy . g ov/ p rint/5568.htmthat would allot space in its desi gn for CO2 capture and storage. Mississippi Power Company: IGCC Plant Mississippi is the proposed location for this project, whic h plans to build an IGCC plant that would commercialize a first-of -its-kind application. The above two IGCC projects would allow for potential CO2 capture in the future, would provide stateof-the-art emission controls far exceeding the emission level requireme nts specified in Section 1703 of the Energy Policy Act of 2005 and would help re duce cost and increase fuel flexibility of IGCC technology. TX Energy, LLC: Coal to Synthetic Gas IGCC Plant Texas is the proposed location for this project, wh ich plans to commercialize a new polygeneration gasification facility that can isolate a significant concentrated stream of CO2 while producing large amounts of power and methanol. INDUSTRIAL ENERGY EFFICIENCY PROJECTS GR Silicate Nano Fibers and Carbonates Washington is the proposed location for this project, wh ich plans a highly energy efficient process for manufacturing paper. Sage Electrochromics: Electrochrom ic Window Manufacturing Project Minnesota is the proposed location for this project, whic h plans to develop a manufacturing facility that would produce energy-efficient windows for the commercial and residential building sectors. SOLAR ENERGY PROJECTS
Luz II N

evada is the proposed location for this project, which plans to develop a highl y efficient large-scale p ower project using concentrated solar -thermal technology. Solyndra, Inc. California is the proposed location for this project, which plans to manufacture hi ghly efficient thin-film p hotovoltaic modules. ELECTRICITY DELIVERY AND EN ERGY RELIABILITY PROJECT
Beacon Power Massachusetts is the proposed location for this project, wh ich plans to develop a system that will enhance peak performance of elect ric generation over the power grid. HYDROGEN PROJECT Bridgeport Fuel Cell Park, LLC Connecticut is the proposed location for this project, wh ich plans to build the largest single-site installation of fuel cells in the world. ALTERNATIVE FUEL VEHICLES PROJECT Pa g e 3 of 4 U.S. De p artment of Ener gy

4/9/2009 http ://www.ener gy . g ov/ p rint/5568.htmTesla Motors N

ew Mexico is the proposed location for this project, whic h plans to build a batt ery-electric powered vehicle with enhanced range that can be produced for the consumer market. BIOMASS PROJECTS Alico, Inc. Florida is the proposed location for this project, wh ich plans a first-of-a-kind commercial-scale cellulosic ethanol plant that would use multiple feedstocks and produce multiple products. Blue Fire Ethanol, Inc. California is the proposed location for this project, whic h plans to build a commercial-scale cellulosic ethanol plant using an arra y of low-cost feedstocks. Choren USA Southeastern , U.S. is the proposed location for this project, which plans to construct an industrial-scale biomass gasification facility for clean synt hetic diesel fuels in the United States. Endicott Biofuels, LLC Virginia is the proposed location for this project, which plans to construct a s econd generation biodiesel and bio-derived products plant that would feature a high level of feedstock flexibility allowing for the p roduction of a broad range of biodiesel fuels. Iogen Biorefinery Partners, LLC I

daho is the proposed location for this project, which plans to build a bioref inery to produce ethanol from a wide range of cellulosic feedstocks a nd to produce other byproducts of value to several industries. Voyager Ethanol, LLC I

owa is the proposed location for this project, which pl ans to build a cellulosic ethanol plant that can accommodate multiple feedstoc ks in the production of ethanol and higher value byproducts. Following funding and authorizati on for the program in February 2007, DOE has established a Credit Review Board to make recommendations to the Secretary of Energy on loan guarantees; named an office director and technical and fi nancial experts to work in the Lo an Guarantee program office; and developed guidelines for the financial and techni cal review of loan guarantee applications. Review the final re g ulations and more about DOE’s loan guarantee program

. U.S. Department of Energy, Office of Public Affairs, Washington, D.C. Pa g e 4 of 4 U.S. De p artment of Ener gy

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