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Senate Bill Would Establish Clean Energy Investment Fund

U.S. Senator Debbie Stabenow (D-MI), a member of the Senate Energy and Natural Resources Committee, recently announced introduction of the 21st Century Energy Technology Deployment Act. The “21st Century Energy Technology Deployment Act,” would reportedly improve the loan guarantee program at the Department of Energy (DOE), to ensure that good clean energy projects receive the upfront investment they need to get off the ground in order to create jobs and develop future energy technology.

“All across Michigan, clean energy technology projects are creating jobs by diversifying our economy and reducing our dependence on foreign oil,” said Stabenow. “However, the credit crisis has left many more clean energy projects short of the investment needed to get off the ground and create jobs here at home. This bipartisan bill will provide a much-needed investment in the development and production in these technologies. It’s an investment that will create jobs, reduce our dependence on foreign oil, and improve our quality of life for generations to come.”

The “21st Century Energy Technology Deployment Act,” also known as CETDA, would reform the existing DOE loan guarantee program, by creating a new “Clean Energy Investment Fund.” The legislation would also create a Clean Energy Deployment Administration (CEDA), under DOE. CEDA would have with strong financial expertise and a directive to improve the investment environment for green technology development and production.

CEDA would be an independent administration within DOE, like the Federal Energy Regulatory Commission. It would be governed by a board of directors and an administrator, all of whom would be appointed with the advice and consent of the Senate. CEDA will also have a permanent Technology Advisory Council to advise on the technical aspects of new technologies and to help set goals for the administration.

The agency would provide various types of credit to support deployment of clean energy technologies including loans, loan guarantees and other credit enhancements as well as secondary market support to develop products such as clean energy-backed bonds that would allow less expensive lending in the private sector. The agency would also seek to accommodate riskier debt and thus provide a mechanism for deployment of the most innovative technologies.

CEDA’s mission would be to encourage deployment of technologies that are perceived as too risky by commercial lenders; thus, the agency is encouraged to back riskier technologies with a higher potential to address our climate and energy security needs. The agency is to use a portfolio investment approach in order to mitigate risk and become self-sustaining over the long term.

CEDA would be an autonomous entity with strong guidance and aggressive goals for technology deployment set by an independent advisory council, in consultation with the Secretary of Energy. The bill sets out a process for goal-setting in the various areas and then mandates numerical targets for achieving the goals, against which the performance of CEDA may be judged. There would be various levels of financial oversight, including audits by the comptroller general and unfettered access to the books of CEDA by the Energy Secretary.

The bipartisan legislation is cosponsored Senators Bingaman (D-NM), Murkowski (R-AK), Dorgan (D-ND), Voinovich (R-OH), Lugar (R-IN), Shaheen (D-NH) and Burr (R-NC).