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The Department of Energy’s Stimulus Loans Went to “Junk” Grade Investments and Firms That Spent the Most Lobbying
Study details the role political connections and lobbying played in securing loansDecember 3, 2013
A new Reason Foundation study finds 22 out of 26 projects were rated as “junk” grade investments before they were awarded taxpayer-backed loans as part of the Department of Energy’s Section 1705 loan program, which was part of the 2009 stimulus bill that focused on renewable energy, electric power transmission, and biofuels projects.
The report also highlights taxpayer-backed loans given to companies with ties to Senate Majority Leader Harry Reid, former Vice President Al Gore, former New Mexico Gov. Bill Richardson, and a company founded by former Maine Gov. Angus Reid, who is now a U.S. Senator. According to the Reason Foundation study, the companies that spent the most on lobbying received the biggest Section 1705 loans.
“These projects were rated by credit rating agencies as junk investments with a high likelihood of failure, but the Department of Energy didn’t seem to care because it was giving loans to the firms that were well connected or were spending the most on lobbying,” said Julian Morris, vice president of Reason Foundation and co-author of the report.
The Reason Foundation report also questions why 83 percent of the American Recovery and Reinvestment Act’s Section 1705 loans went to solar energy projects, with wind receiving 11 percent of the funds.
Divestiture would lower deficit, benefit taxpayersOctober 8, 2013
In 1987, the federal government divested itself of Conrail, a freight railroad based largely in the Northeast and Midwest. Just as that divestiture was nearing completion, President Reagan is reported to have asked: "Okay, when do we sell the TVA?" While Reagan wasn’t able to achieve the sale during his presidency, fortunately the current administration is revisiting the issue today. Buried in the Obama administration’s FY 2014 budget is a commitment to undertake a “strategic review of options for addressing the Tennessee Valley Authority’s (TVA) financial situation, including the possible divestiture of TVA, in part or as a whole.”
Wind turbines have a significant impact on this nation’s birdsAugust 1, 2013
In his recent climate change speech, President Barack Obama once again pushed for more wind energy. "The plan I'm announcing today will help us double again our energy from wind and sun," the president said. "Today, I'm directing the Interior Department to green-light enough private renewable energy capacity on public plans to power more than 6 million homes by 2020." The latest wind power plan is likely to cost taxpayers a lot of money and cost a lot of birds their lives.
Would the Obama administration let oil or coal companies kill endangered species?August 1, 2013
From Solyndra, the failed solar company that cost taxpayers over $500 million, to Fisker, the car maker that could cost taxpayers $170 million, the federal government is spending billions of taxpayers' dollars on failing green energy projects. And now a planned wind farm near Tehachapi is shining a light on the environmental costs of such subsidies.
In May, the U.S. Fish & Wildlife Service gave San Diego wind power company Terra-Gen an exemption from prosecution if a turbine on its proposed wind farm 100 miles north of Los Angeles accidentally kills a California condor, one of the rarest species in America.
First, the environmentalists wanted to get rid of paper grocery bags because they were the result of destroying too many trees. Then the market developed a lighter, stronger alternative in the form of plastic bags. Now the environmentalists want to get rid of these, too, and force everyone to bring their own reusable bags when they go to the store.
Reason's Len Gilroy Talks TVA Privatization, Annual Privatization Report on Heartland Institute PodcastMay 23, 2013, 3:54pm
Earlier this week, I had the pleasure of sitting down with the Heartland Institute's Steve Stanek for an episode of their Heartland Daily Podcast, where we discussed President Obama's recent budget proposal to study a potential privatization of the Tennessee Valley Authority (TVA).
View Resources by Type
- The Limits of Wind Power
Very high wind penetrations are not achievable in practice due to the increased need for power storage, the decrease in grid reliability, and the increased operating costs
William J. Korchinski and Julian Morris
October 4, 2012
- Analysis of California's Propositions 7 and 10: Renewable Energy Mandates and Handouts
Policy Brief 75
October 1, 2008
- Fueling America
How Hydrogen Cars Affect the Environment
William J. Korchinski
November 1, 2004
- A Federal Ethanol Mandate
Is it Worth it?
Matthew McCormick, Scott Freifeld and Lynne Kiesling
November 1, 2003
- Movin' Juice
Making Electricity Transmission More Competitive
Lynne Kiesling and Adrian Moore
September 1, 2003
- Standard Market Design in Wholesale Electricity Markets
Can FERC's Proposed Structure Adapt to the Unknown?
Lynne Kiesling and Brian Mannix
November 1, 2002
- Electric Cooperatives and a Changing Power Industry
How Outdated Statutes Short-circuit Competitive Markets
Lynne Kiesling and Terri Kandalepas
August 1, 2002
- Powering Up California
Policy Alternatives for the California Energy Crisis
Adrian Moore and Lynne Kiesling
February 1, 2001
- Getting Electricity Deregulation Right
How Other States and Nations Have Avoided California's Mistakes
February 1, 2001
- Integrating Municipal Utilities into a Competitive Electricity Market
Adrian Moore and Jeff Woerner
May 1, 2000
- Muni Power Grabs
Municipal Utilities, Tax-exempt Debt, and the Competitive Market
Adrian Moore and Jeff Woerner
November 1, 1999
- Federal Power
The Case for Privatizing Electricity
March 1, 1996
- The Case Against Electric Vehicle Mandates in California
Peter Gordon and Harry W. Richardson
May 1, 1995
- Toward Accountability and Efficiency
Reform of the Bonneville Power Administration
Kenneth W. Costello and David Haarmeyer
April 1, 1992
- Toward Resolving The Access Issue
User Ownership Of Electric Transmission Grids
August 1, 1991
- Public vs. Private
Alternative Ownership Scenarios for Electric Utilities
Michael A. Crew and Paul R. Kleindorfer
June 1, 1990
- Privatization of the Tennessee Valley Authority
October 1, 1988
- The Department of Energy’s Stimulus Loans Went to “Junk” Grade Investments and Firms That Spent the Most Lobbying (12/3)
- Obama and Reagan Agree: Divest the Tennessee Valley Authority (10/8)
- Obama Administration's Wind Energy Subsidies Have Birds Very Frightened (8/1)
- Cronyism Threatens California Condors (8/1)
- L.A. Becomes Latest to Pass Nanny-State Plastic Bag Ban (7/10)
- Ronald Bailey
- Shikha Dalmia
- Adrian Moore
Vice President, Policy
- Julian Morris
Vice President, Research
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Director of Communications
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