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Politico Pro: Hastings, McClintock: Stop WAPA loans
Posted by Committee Staff on November 10, 2011

Hastings, McClintock: Stop WAPA loans

By Alex Guillen
Politico Pro
11/9/11 4:05 PM EST

House Republicans are worried about yet another Energy Department loan program.

Reps. Doc Hastings (R-Wash.) and Tom McClintock (R-Calif.) want the DOE to stop giving out loans through the Western Area Power Administration, one of the department’s four marketing administrations.

In a letter Wednesday to Energy Secretary Steven Chu, Hastings and McClintock cite a DOE inspector general report, released Monday, that described mismanagement on a $161 million transmission loan to Montana Alberta Tie Ltd.

The lawmakers pointed to a passage in the report in which the IG’s office wrote that “although we did not confirm their assertions, certain Western officials indicated that they encountered pressure from the department to spend Recovery Act funds expeditiously.”

The IG report also noted that WAPA’s program funding will run out in the coming year, and that there may be no revenue from projects like the behind-schedule transmission line to keep it going.

“We firmly believe that any additional funding allocations made from this program puts American taxpayers and existing WAPA ratepayers at unacceptable financial risk,” Hastings and McClintock wrote. DOE “should cease and desist with any and all WAPA borrowing authority expenditures and activities.”

To make up for the coming gap, the IG report says, WAPA is “considering various options including a supplemental appropriation request or additional borrowing.”

Hastings and McClintock wrote, “We are very concerned that the agency could be contemplating additional taxpayer funding or tapping existing ratepayer revenues to overcome this funding shortfall.”

The department can expect specific requests for information soon, they added.

In October, the Natural Resources Committee sent to the floor a measure from McClintock, the chairman of the water and power subcommittee, aiming to repeal WAPA’s loan authority.

That authority and the funding initially backing it were enacted as part of the 2009 stimulus.

DOE opposes stripping WAPA’s loan authority, spokesman Damien LaVera told POLITICO by email.

“While the department has identified ways to improve the program, we are adamantly opposed to efforts in Congress to repeal this important financing mechanism which can improve electricity delivery and create jobs,” LaVera wrote. The department is implementing the inspector general’s recommendations, he added.

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