WHEN & HOW DOE WILL SPEND

Chu Unveils DOE Changes, Timeline for Stimulus Energy Spending
Josie Garthwaite, February 19, 2009 (Fortune via CNN Money)

"Secretary Steven Chu [and]…the Department of Energy… announced a series of reforms designed to expedite the dispersal of loans and loan guarantees — changes that the DOE says will position it to start offering loan guarantees from a much-delayed loan guarantee program by late April or early May…[N]ew loan guarantees will be offered by early summer, and at least 70 percent of its share of the stimulus will be dispersed by the end of 2010."

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"This means new allotments for the smart grid, advanced batteries, alternative-fuel vehicles and the array of clean energy initiatives supported by the stimulus will likely avoid languishing in the kind of multiyear application and evaluation process used for the $25 billion low-interest loan program for fuel-efficient vehicles and the Loan Guarantee Program for clean energy technologies. Planned reforms include:
- Rolling appraisals of applications…when they are submitted so that decisions can be made more quickly.
- Streamlining and simplifying… paperwork.
- Accelerated loan underwriting by using outside partners.
- …[T]he opportunity to pay [up-front] fees as part of the loan at closing…Further reduction…by restructuring credit subsidies so they are paid over the life of the loan.
- Additional staff and resources to process applications.
- Working with the industry to attract good projects…and helping them navigate…
- A web site that will provide increased transparency…"

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"Earlier this month, DOE Loan Guarantee Program Director David Frantz revealed at a Senate hearing that even the most progressed applications under the older program (created under the Energy Policy Act of 2005) would take a few months to process…

"…If all goes according to Chu’s plan at the DOE, approved projects in Tesla’s [$350M Model S loan application] cohort could have guarantees disbursed in the 4-5 month time frame…The green light on a loan guarantee, however, does not mean money in the bank. As the DOE explains, 'These offers may still require recipients to secure their own share of the financing –- similar to earnest money in a home mortgage – or meet other conditions prior to closing.'"