Loan Programs Office (2020 Presidential transition)

Book 3 - Organization Overview
Entire 2020 DOE Transition book As of October 2020

The Loan Programs Office (LPO) provides access to debt capital for large-scale, all-of-the-above energy infrastructure projects in the United States. LPO executes this mission by:

Guaranteeing loans to eligible innovative energy projects through the Title 17 Loan Guarantee Program (Title 17).
Providing direct loans to eligible manufacturers of advanced technology vehicles and qualifying components through the Advanced Technology Vehicles Manufacturing (ATVM) Loan Program.
Providing partial loan guarantees to support economic opportunities to tribes through energy development projects and activities through the Tribal Energy Loan Guarantee Program (TELGP).

Mission Statement

To catalyze energy infrastructure investments to achieve America’s energy objectives and advance economic growth.

Budget

Fiscal Year	Budget
FY 2019 enacted	$39,000,000
FY 2020 enacted	$39,000,000
FY 2021 requested	$39,000,000

Notes:

The Title 17 funding levels are offset by loan guarantee collections of $20.7M in FY 2019 and $3.0M in FY 2020 and FY 2021.
The Fiscal Year (FY) 2021 budget request maintains current Administration policy to eliminate the Title 17, ATVM, and TELGP. The FY 2021 request also cancels all remaining appropriated credit subsidy in the Title 17 (-$160.7M) and TELGP (-$8.5M) programs for the scored offset of -$169.2M.

Loan Authority

LPO has more than $40 billion in remaining loan guarantee and loan authority for the Title 17, ATVM, and TELGP programs to finance innovative clean energy projects, advanced technology vehicles, and component manufacturing and energy projects and activities that support economic development and tribal sovereignty.

Remaining Loan Authority

Fiscal Year	Budget
Title 17: Advanced Fossil Energy Advanced Nuclear Energy Renewable Energy & Efficient Energy	$8.5 billion available1 $10.9 billion available Up to $4.5 billion available2
ATVM	$17.7 billion available
TELGP	Up to $2.0 billion available

Notes: The FY 2021 Budget Request proposes to cancel the remaining loan volume.

The Advanced Fossil Energy loan authority of $8.5 billion includes the $2 billion conditional commitment for the Lake Charles Methanol project .
Under this Solicitation DOE will make available up to $3.0B in loan guarantee authority, plus an additional amount that can be imputed based on the availability of an appropriation for the credit subsidy cost of such imputed loan guarantee authority.

Human Resources

FY 2020 authorized full-time equivalents (FTEs): 96

History

In 2007, the Loan Guarantee Program Office (LGPO) and the ATVM Loan Program Office were stood up and began operations under the Department’s Office of the Chief Financial Officer. In November 2009, the first Executive Director of the LPO was appointed and in June 2010, LPO was officially established as a new, independent organization, absorbing the LGPO and ATVM organizations. In February 2018, the TELGP was transferred to the LPO from the DOE Office of Indian Energy Policy and Programs.

The LPO Executive Director reports directly to the Under Secretary of Energy and has the responsibility for managing the Title 17, ATVM, and TELGP loan programs.

Title 17 Loan Guarantee Program

Section 1703 of Title XVII of the EPAct of 2005 authorizes DOE to provide loan guarantees for innovative energy projects in categories including advanced nuclear facilities, coal gasification, carbon sequestration, energy efficiency, renewable energy systems, and various other types of projects. Projects supported by DOE loan guarantees must avoid, reduce, or sequester pollutants or anthropogenic emissions of greenhouse gases; employ new or significantly improved technologies compared to commercial technologies in service in the United States at the time the guarantee is issued; and offer a reasonable prospect of repayment of the principal and interest on the guaranteed obligation. In FY 2011, pursuant to the Department of Defense and Full-Year Continuing Appropriations Act, 2011 (Public Law No. 112-10), funds were appropriated that allowed DOE to pay the credit subsidy cost for certain renewable energy or efficient end-use energy technologies. There is currently $160.7 million remaining in appropriated credit subsidy.

Section 406 of the American Recovery and Reinvestment Act of 2009 amended Title XVII of the EPAct of 2005 by establishing Section 1705 as a temporary program for the rapid deployment of renewable energy and electric power transmission projects, as well as leading edge biofuels projects. The addition of the Section 1705 program included an appropriation of funds that allowed DOE to pay the credit subsidy cost of certain loan guarantees. The authority to enter into new loan guarantees under Section 1705 expired on September 30, 2011, but the program continues to administer and monitor the portfolio of loan guarantees obligated prior to the expiration date.

ATVM

Section 136 of the Energy Independence and Security Act of 2007 (EISA) established the ATVM Loan Program, consisting of direct loans of up to $25 billion in total loan authority to support the development and manufacturing of advanced technology vehicles and qualifying components in the United States. Currently there is $17.7 billion in remaining loan authority and $4.3 billion in appropriated credit subsidy. Per EISA subsection (d) (1), ATVM loans must be made through the Federal Financing Bank and the full credit subsidy cost must be paid using appropriated funds.

TELGP

The TELGP was authorized pursuant to Title XXVI of the EPAct of 1992, as amended, to make available up to $2 billion in partial loan guarantees. Funding was first appropriated for the TELGP in FY 2017, and in FY 2018, DOE issued the first tribal energy loan guarantee solicitation to support tribal energy development. Pursuant to the Consolidated Appropriations Act, 2017 (H.R. 244, Public Law 115– 31) Congress appropriated $8.5 million to cover the credit subsidy costs associated with the $2 billion in available loan authority.

Functions The LPO currently utilizes the following six divisions to originate new loans and proactively monitor the portfolio: Origination Division; Portfolio Management Division; Risk Management Division; Technical and Project Management Division; Legal Divisionl and Management Operations Division. In administering the Title 17, ATVM, and TELGP loan programs, the LPO:

Demonstrates the viability and finance-ability of new or significantly improved energy technologies.
Funds innovative technologies that reduce greenhouse gas emissions and air pollutants.
Creates jobs by financing the growth of commercial clean energy technologies.
Provides direct loans to eligible automobile manufacturers and component suppliers for projects that re-equip, expand, and establish manufacturing facilities in the United States to produce advanced technology vehicles, ultra- efficient vehicles, and components for such vehicles.
Provides access to debt capital for tribal ownership of energy projects and activities that support economic development and tribal sovereignty
Protects United States taxpayers by ensuring the loans and loan guarantees LPO provides have a reasonable prospect of repayment.

LPO manages a portfolio comprising more than $35 billion of loans, loan guarantees, and conditional commitments covering more than 30 projects. Overall, these loans and loan guarantees have resulted in more than $50 billion in total project investment. $29 billion in loan funds have been disbursed and over $11 billion of principal has been repaid to date. The portfolio currently has 3,953 megawatts of generation capacity and annual production of 2.3 million automobiles.

Recent Organization Accomplishments

LPO has had a number of accomplishments, including, but not limited to:

Launching new markets

LPO has provided:

$12 billion in debt financing to support the only nuclear power plant currently under construction in the United States at the Vogtle Electric Generating site in Georgia.
$2 billion, conditionally committed but not finalized yet, to support a pet-coke-to-methanol project which also captures and sequesters carbon dioxide.
$1.7 billion towards on-shore wind power generation
$343 million towards a transmission line.
$7.8 billion to support automotive fleet modernization and electric vehicle manufacturing including the first debt financing to Tesla.
$5.8 billion to concentrating solar power, including the first projects in the United States with thermal storage.
$546 million to advanced geothermal energy.
$4.7 billion towards photovoltaic (PV) solar power generation including the first five utility-scale solar PV power plants larger than 100 megawatts in the United States.

Prudently managed portfolio

LPO manages a portfolio of $35 billion in loans, loan guarantees, and conditional commitments, with losses of only 2.7% of total disbursements of $29 billion.

Supporting Jobs in the United States

The Title 17 and ATVM programs have supported more than 55,000 jobs in the United States.

Reduced Pollution or Harmful Greenhouse Gas Emissions

Overall LPO projects have prevented more than 50 million metric tons of CO2 emissions.

Improved Loan Origination Process

In 2019, LPO employed an enhanced pre-application consultation process to better prepare prospective applicants to submit successful applications and shorten the time between formal application and loan closing. Overall, LPO reported 294 consultation conversations in 2019, and in 2020 there have been over 300 consultations to date.

Leadership Challenges

LPO challenges include but are not limited to:

Maintaining a strong and healthy portfolio

LPO’s Portfolio Management Team vigorously manages the existing portfolio of loans and loan guarantees.

Expanding the existing LPO pipeline of project applications

LPO currently has a robust pipeline of project applications for both Title 17 and ATVM. However, the program needs to maintain a continuous outreach and business development effort to sustain the current pipeline and attract more applications for high-quality projects. Additionally, LPO needs to continue to raise awareness among tribal borrowers and distinguish the value of TELGP from other government programs that support tribes. LPO is addressing these challenges through sustained industry outreach and through the enhanced pre-application process.

Issuing conditional commitments to high-quality projects

LPO must continue with due diligence on high- quality deals in the pipeline to advance worthy projects to conditional commitment.

FY 2021 Budget Request

The FY 2021 budget request proposes to eliminate the Title 17, ATVM, and TELGP, because the private sector is better positioned to finance the deployment of commercially viable energy and advanced vehicle manufacturing projects. The LPO continues to review applications submitted under currently open solicitations. LPO will continue to work with applicants and conduct due diligence consistent with current law.^[1]