Natural Resources Committee Home

September 28, 2009

Mr. David G. Frantz
Director, Loan Guarantee Program Office
Office of the Chief Financial Officer
U.S. Department of Energy
1000 Independence Ave., SW
Washington, DC 20585-0121
lgprogram@hq.doe.gov

RE: RIN 1901-AB21 Comments on Proposed Loan Guarantee Program Rules

Dear Mr. Frantz:

On behalf of the nation's governors, we write regarding the Department of Energy Notice of Proposed Rulemaking (NOPR) which amends the Title XVII loan guarantee program.  Governors applaud the Department’s proposed rule as a crucial means for assisting the commercialization and deployment of clean energy sources.

Governors support efforts to promote advanced technologies in the electricity sector that promote clean, secure, and affordable energy to fuel America’s future.  To that end, Governors support the expeditious implementation of the federal loan guarantee program for innovative technologies, as enacted in Title XVII of the Energy Policy Act of 2005.  Effective implementation of the loan guarantee program can help to ensure electricity sector reliability while responding proactively to the challenge of climate change, just as many Governors have done in their home states. 

The NOPR corrects significant problems regarding the sharing of collateral and undivided interests that made the program unworkable for the majority of applicants.  These corrections are necessary to allow a full range of partners to participate in large clean energy technology projects.  These partnerships will help to spread the cost and risk of these projects and will be beneficial for both project sponsors and lenders, including the federal government.

In addition, Governors support additional modifications that would allow states to participate in the loan guarantee program, including managing loan guarantee funds.  Including provisions that permit states to leverage funding to match commercial financing would increase investor confidence and effectively accelerate the development of new technologies.

Governors encourage adoption of the proposed rule by the Department of Energy, and anticipate the successful implementation of the Title XVII loan guarantee program.  We look forward to your response and to working with you to find solutions to ensure clean, affordable energy for all Americans.

Sincerely,