RFA Supports GAO Recommendations for Improving Loan Guarantee Programs

DOE loan program needs adjustment to more fairly consider applications from ethanol companies.

Published on: Jul 13, 2010

The Government Accountability Office has issued a report that urges the Energy Department to change its renewable energy loan guarantee program to improve effectiveness. The GAO recommends, among other things, that the department develop performance goals that reflect the program's policy goals and activities; revise the loan guarantee process to treat applicants consistently unless there are clear, compelling grounds not to do so; and develop mechanisms for administrative appeals and for systematically obtaining and addressing applicant feedback. The Renewable Fuels Association supports these recommendations.

RFA has been highly critical of the loan guarantee program and has repeatedly urged the Department of Energy to review and adjust the program to more fairly evaluate applications from cellulosic and other next generation ethanol companies.

RFA President and CEO Bob Dinneen says access to capital is a chief hindrance to the commercial deployment of cellulosic ethanol technology. He says the DOE has created a loan guarantee program that in theory is helpful, but in practice has proven difficult if not impossible for cellulosic ethanol companies to access. Dinneen says the Obama Administration must make sure loan guarantee programs are workable and accessible for qualified companies regardless of their technology if the goals of the RFS are to be met.