Smart Grid Today reveals behind-the-scenes effort to replenish $2 billion diverted to "cash for clunkers" from DOE's smart grid project loan guarantees
A behind-the-scenes effort is taking shape to replenish the $2 billion diverted to the federal government's recent "cash for clunkers" program from DOE's innovative technology loan guarantee program, Smart Grid Today reveals.


ROCKVILLE, MD, December 09, 2009 /24-7PressRelease/ -- A behind-the-scenes effort is taking shape to replenish the $2 billion diverted to the federal government's recent "cash for clunkers" program from DOE's innovative technology loan guarantee program. Smart Grid Today asked Rep Edward Markey, D-Mass, about the issue at a GridWise Alliance briefing in Washington, DC last week -- in an exclusive hallway interview after he spoke.

"I'm very much interested in having that money replenished and I am working toward that goal right now," Markey told Smart Grid Today.

Lawmakers have not yet crafted a formal mechanism to put the money back -- but the potential jobs bill discussed in an employment summit President Obama held at the White House last week could be a vehicle for the return, a congressional staffer told Smart Grid Today, speaking on the condition of anonymity.

Members of Congress and White House officials have "committed to working with DOE to ensure that the critically important funding for renewable energy loan guarantees is restored," DOE Deputy Press Secretary Jen Stutsman told Smart Grid Today after the journal relayed Markey's comment to DOE.

"We are continuing to work on larger [loan guarantee] solicitations to make sure we are ready to move forward once funding is restored."

If the money -- that was used this year as an incentive for people to trade in older cars and buy new ones -- is not returned, funds available for smart grid firms seeking DOE loan guarantees for transmission projects funded under Section 1705 of ARRA could be significantly cut, Graham Noyes, a Stoel Rives lawyer, told Smart Grid Today last month.

Noyes halved his estimate of the most DOE might give in loan guarantees for smart grid projects with transmission objectives -- to $30 billion from $60 billion -- since "there has not yet been any action to replenish the loan guarantee fund and DOE does not appear to be willing to aggressively leverage the funding."

Section 1705 of ARRA -- titled "Temporary program for rapid deployment of renewable energy and electric power transmission projects" -- added $6 billion to a $10 billion loan guarantee program established in EPAct 2005 to help finance innovation in technology, Noyes told Smart Grid Today in May. "We'll see a very healthy portion of that expressly authorized for smart grid activities by private developers," he predicted at the time. The DOE loan guarantee program includes not only electric power transmission but also renewable energy and leading-edge bio-fuel technologies.

When the Obama administration took the $2 billion out of the loan guarantee program to give cash rewards to people replacing their gas guzzlers, the "talk at the time" was that the $2 billion would be put back into the loan guarantee fund, Noyes told Smart Grid Today last month.

Large and small utilities plus private developers are seeking DOE loan guarantees for transmission projects funded under Section 1705, Matt Rogers, senior adviser to the secretary at DOE, said recently in response to our question at a White House press office briefing. DOE recently put out a specific solicitation under Section 1705 for transmission "to bring renewable generation resources into load," he added during the briefing. DOE has "quite a good pipeline of attractive transmission projects in that pool," Rogers noted.

DOE first made use of the loan guarantee program this year, giving the initial two guarantees to "clean tech" firms. In both cases, the actual loans are being funded by the US Treasury's Federal Financing Bank. Loans guaranteed by the DOE program could also be funded by private lenders that take part in DOE's Financial Institution Partnership Program (FIPP), Noyes told Smart Grid Today.

BGE, PNNL see bright future

Markey is chairman of the House Select Committee on Energy Independence & Global Warming and spoke yesterday -- about upgrading "the electricity world" -- to a couple dozen people gathered at the GridWise event that was calling attention to two industry assessment documents. One of those documents focuses on gaps in the development of the smart grid.

Smart Grid Today asked some of the authors of the documents, whom GridWise had gathered for the briefing, whether the $2 billion represented a gap that needs filling.

"At the end of the day, it was important to us that we had a business case that ... would stand on its own, with or without stimulus dollars," Marc Case, senior VP for strategy & regulatory affairs at Baltimore Gas & Electric (BGE), told Smart Grid Today.

As it reviewed grant applications, DOE was "heartened by the fact that so many companies had smart grid plans with really robust business cases," he added, noting that DOE awarded BGE $200 million in SGIG matching funds.

"The stimulus dollars are helpful in our case for moving the Public Service Commission along a little faster than they otherwise would,allowing us to roll it out quicker than we otherwise would. But I think we're going to find that most smart grid deployments are going to make sense even without federal support."

Carl Imhoff declined to address the "cash for clunkers" diversion question directly but predicted that SGIG funds would stimulate "a lot of increased activity" in smart grid investment. He is manager of the electricity infrastructure market sector for Battelle-operated Pacific Northwest National Laboratory.

"I call it 'the secondary effect'," he added. "A lot of people I've talked to who did not win a grant said ... they are looking for ways to move forward partially, if not fully, on their plans."

Imhoff is, to be sure, sitting in the catbird's seat. The Battelle-led Pacific Northwest Smart Grid Demonstration Project scored an $88.8 million smart grid regional demonstration project grant -- the biggest of the 32 announced last week.

ABOUT SMART GRID TODAY
MMI Inc. in Rockville, MD publishes Smart Grid Today for PDF delivery by email and publication via password-protected website for paying subscribers every business day. The publication is subscription-based and always free of advertising to maintain its founders' four-plus decades of tradition and reputation in reliably delivering unbiased and probing trade journalism and breaking news. For more information, visit http://www.smartgridtoday.com/PR.

SMART GRID TODAY CONTACT
Brett Brune
Associate Editor
+1-301-769-6903 Ext. 105
brettbrune@smartgridtoday.com

Further Related Resources:


Press Release Contact Information:

Season Crawford
Smart Grid Today
Marketing Directory & Associate
4908 Hornbeam Dr.
Rockville, MD
United States 20853
Voice: 202-380-9403 x102
Fax: 202-380-9403
Website: Visit Our Website