US House rebuffs Cape Wind aid

The US House of Representatives, controlled by the opposition Republican Party, passed an energy and water appropriations bill with an amendment to prohibit a $150m federal loan guarantee for Cape Wind’s offshore project.

While the bill as written has no chance of becoming law – Democrats control the Senate – it does signal the Republican House leadership's resolve to torpedo federal loan support for large-scale renewable energy projects.

Representative Randy Weber of Texas proposed the amendment to include the ban on a conditional loan guarantee commitment that the US Energy Department announced on 1 July.

The legislation including the amendment passed 253-170 with most Democrats voting against the measure. The 435-seat House includes 234 Republicans, 199 Democrats, with two vacant seats.

Should Republicans re-capture control of the 100-seat Senate in 4 November national elections, it could spell the end for DOE loan guarantees for big solar and wind projects. Democrats now hold 53 seats, Republicans 45, with independents retaining the other two.

The Republican leadership’s ire toward DOE’s loan guarantee program partly reflects opposition toward President Barack Obama’s clean energy agenda. It also responds to taxpayers having lost hundreds of millions of dollars after DOE guaranteed loans to thin-film maker Solyndra and several other firms that subsequently went bankrupt.

The provisional loan guarantee for Cape Wind, however, would come from a different program than the one involving Solyndra and the others. Developer Energy Management Inc. (EMI) originally sought a $2bn loan guarantee from the Section 1705 program, which DOE rejected.

EMI was reportedly seeking a $350m to $500m loan guarantee from the Section 1703 program for innovative technologies.

US Representative William Keating, a Massachusetts Democrat, slammed the bill, accusing Republicans of trying "to undermine the development of offshore renewable energy."

Under the proposed financing structure for Cape Wind, America’s first commercial-scale offshore wind project, DOE would be part of a group of public and private lenders.

The loan guarantee would not take effect until Cape Wind fully finances the project, which EMI expects to finalize in the fourth quarter.

Cape Wind would be located south of Cape Cod. It is a 468MW facility with a 363.3MW first stage.  EMI hopes to complete construction in the second half of 2016.