The Department of Energy’s (DOE) Inspector General has issued a call to immediately suspend the issuance of billions of dollars in loans for green energy projects. This urgent request stems from concerns over potential conflicts of interest involving contractors who evaluate loan applications. These contractors, the report alleges, may be simultaneously serving the DOE and potential loan recipients.
The interim report, released late Tuesday, strongly advises the DOE’s Loan Programs Office (LPO) to cease all financing activities until it can guarantee adherence to conflict of interest regulations. The report emphasizes the need to ensure that contracting officers and their representatives are both complying with these regulations and enforcing related contractual obligations.
The LPO currently manages over $385 billion in low-interest loans, supporting companies engaged in green energy projects ranging from advanced battery technology and nuclear power to next-generation vehicles. With approximately $20 billion in remaining loan authority before the end of President Biden’s term, the LPO recently granted a record-breaking $15 billion conditional loan to California-based electric utility PG&E.
The DOE has responded to the report, asserting that it contains numerous inaccuracies and a fundamental misunderstanding of LPO contracting procedures. A spokesperson expressed confidence in the LPO’s full compliance with DOE conflict of interest regulations, emphasizing the agency’s serious commitment to addressing such issues.
LPO Director Jigar Shah, in a response included within the interim report, stated that despite an extensive audit encompassing over one hundred contract files, the Inspector General has not identified any organizational conflicts of interest.
Inspector General Teri Donaldson, a former general counsel for the U.S. Senate environment committee under Senator John Barrasso (R-WY), plans to release a comprehensive report upon completion of the investigation. Senator Barrasso, representing Wyoming, a leading coal-producing state, has previously criticized the LPO for alleged favoritism in its grant practices. Donaldson was nominated as DOE Inspector General by former President Donald Trump in 2018.
The DOE maintains its commitment to continue its work as directed by Congress, despite the Inspector General’s concerns. The final report and its findings will undoubtedly play a significant role in shaping the future of green energy loan programs within the Department of Energy.
