Questions Arise Over State's Clean Energy Loans
California Watch Investigation: One Company Got Loan Despite Bankruptcy
Posted: 10/28/2011
Last Updated:
600 days ago
The state of California is giving billions of dollars of taxpayer money to clean energy companies, but many fear those companies could fold, according to information obtained by 10News' media partner California Watch.
In California, many new loans are going to build solar production power -- $1.5 billion for a plant in Riverside County, $646 million for a solar plant in Lancaster, $1.2 billion for a solar plant in San Bernardino and $1.2 billion for a plant in San Luis Obispo.
One of those companies, SunPower, posted a loss of nearly $150 million on August 9, and its stock is down 25 percent.
One month later, on the eve of the loan program deadline, the Department of Energy approved a $1.2 billion loan guarantee to the company.
Giving companies with shaky financials money is what worries the U.S. Government Accountability Office. When the Department of Energy was trying to get the original loans out, the GAO said corners were cut."When we looked at the 10 loans that had been committed to as of summer 2010, we found that fully five of those loans had been committed to without having gone through the full battery of independent analyses that are required in the due diligence process. That's a problem," said Franklin Rusco of the Government Accountability Office.The GAO would not identify the companies they are alleging did not go through a full review.SunPower was not part of that loan group.SunPower declined to comment, saying they were in their quiet period before their latest earnings release.The Department of Energy maintains all new loans, including SunPower, were approved after a full vetting process.
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According to California Watch, detractors said taxpayers got burned by President Barack Obama's stimulus package for Solyndra, a solar energy company.However, that company's bankruptcy apparently did not deter the Department of Energy from giving $8 billion more dollars to clean energy companies in California.Former Department of Energy employee Sal Zelermeyer said he is worried there may be more companies like Solyndra out there."I think taxpayers certainly have the right to be concerned that some of the due diligence issues that arose during the Solyndra case could be implicated in some of the recent loan guarantees," said Zelermeyer, who was with the DOE in 2007 when Solyndra applied for a loan.The Department of Energy originally received $36 billion from Obama's stimulus package to fund clean energy project. That is where Solyndra got its controversial $535 million loan.In a May 2010 speech at Solyndra's Fremont, Calif., headquarters, Obama said, "The true engine of economic growth will always be companies like Solyndra."Even after Solyndra's collapse, the Department of Energy continued to approve loans right up until last month's deadline.California Watch uncovered the following information:Copyright Do you have more information about this story? Click here to contact usCopyright 2011 by 10News.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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