loan guarantees

As fallout from the Solyndra bankruptcy continued to build, Jonathan Silver, Executive Director at DOE's Office of Loan Programs finally stepped down.  This outcome couldn't have been a total surprise for him:  Silver came from a venture capital background, knew the failure rates of DOE's projects would likely be high, and understood that the bets DOE was making were orders of magnitude larger than what had been done before.  In an interview with Politico earlier in the year, Silver noted that the scale of credit supports his office was providing were massive.  “These are the biggest transactions in our industry," he said.  "No one is working at a scale like this — anywhere.”  Maybe even DOE will stop now.

Silver is leaving DOE to become a distinguished visiting fellow at DC policy shop Third Way.  Having played many years ago as a (not very good irregular) on Rep. Chet Atkin's (D-Mass.) softball team, led at the time by Third Way founder Jim Kessler, I've no doubt that Third Way will be a fun place to work. In terms of energy policy though, I'm expecting more "Washington Way" than "Third Way" from Silver there: a continued focus on large scale government subsidies to favored energy sources. 

This philosophy seems to be much in line with Third Way's own thinking on these issues, at least in regards to nuclear.  In a January 2010 policy piece on nuclear financing Third Way advocated for "at least $100 billion" in loan guarantees to nuclear (p. 1), a figure in line with the most extreme industry boosters such as NEI.  The paper further noted that even this wouldn't be enough, and that other types of supports would also be needed.  A paper later that year on small reactors again advocated for large amounts of earmarked government subsidies to nail down designs and build the first set of reactors.  As soon as you do that, they argued, prices would fall with experience and reduced perceptions of risk.  Yet the fact that these exact same arguments have been made by the nuclear industry since the mid-1950s, and the reactors are still uncompetitive without very large subsidies, did not seem to carry much weight.

Back in April of 2010, I was researching nuclear subsidies in depth for this report, and Third Way's presentation of nuclear finance as a critical path item for clean energy seemed off to me.  I sent the authors a series of questions to help clarify their position on the high risk and costly recommendations they were making:

1)  It seems as though your support for larger loan guarantees for nuclear is predicated on the grounds that nuclear power is needed to address climate change.  If it could be shown that other mechanisms of pulling carbon out of the economy were less expensive, faster, and lower risk, would your support for large credit subsidies to nuclear change?  Would you favor competitive tendering of subsidies to carbon-reducing energy technologies in order to minimize the public cost per mt of CO2e avoided over earmarked subsidies to specific forms of energy?

2)  The US economy quite regularly develops innovative risk syndication approaches to bring high risk/high reward ideas to fruition.  Venture capital, for example, brings millions of dollars into enterprises with no existing assets.  In evaluating the argument that low market cap for utilities precludes the ability to privately finance nuclear plants, did you explore the variety of alternative risk sharing mechanisms -- from joint ventures and power purchase agreements -- that could have overcome the market cap constraint? 

3)  Your paper repeatedly states a need to bring financing costs down for the nuclear sector.  Does this reflect a belief that these capital costs are not reflective of real market risks, and therefore unimportant to reflect in delivered power prices?  I would argue that far from shifting these risks on to taxpayers, you want to be able to differentiate high capital risk power sources from low ones; and that removing this differentiation creates large barriers to entry for smaller scale, more rapidly deployable technologies.

The large nuclear projects require third party credit assessments of the project absent the loan guarantees.  Would Third Way support making those documents public to the parties (i.e., taxpayers) taking on the credit risk?

4)  You advocate CEDA [Clean Energy Deployment Administration] as the best path forward.  Has Third Way done any formal review of institutional checks and balances in the CEDA proposals, and assessed the incentive alignment of key decision makers?  If so, could you please send it to me?  My reviews of these issues have found the schemes quite wanting and at high risk of failure.

As an aside, your mention of CBO's scoring of the nuclear loan guarantee program at only 1% seems inaccurate.  One nuclear-specific review of nuclear economics scored the subsidies via loan guarantees at zero, under the assumption that the credit subsidy would fully prepay the default risk.  That author has acknowledged to me that this represents an assumption rather than a certainty.  Later CBO reviews did assume a 1% net interest rate subsidy (after credit default payments), but did so as a place holder because they were concerned DOE would try to represent the guarantees as zero cost.  CBO has not done any type of scenario modeling of this, due to a requirement on them to produce point estimates.  However, in conversations I've had with some of the staff they do recognize that losses could be far higher.  In fact, a 2003 review by CBO of nuclear loan guarantees surmised a 50% default rate and about 25% net loss after post-default recoveries. 

5)  Do you have any examples in which the federal government has successfully selected and monitored highly concentrated credit support (on the order of $5-8 billion for a single investment) for private investment?  I'd very much appreciate if you could send me the example, as I've not yet found one.  Note that bailouts to large, diversified firms such as AIG or Goldman Sachs would not meet this criteria because (a) they were initiated for very different reasons; and (b) they are supporting a wide range of activities not a single industrial facility.  Furthermore, these and other historical bailouts normally give the taxpayer stock warrants to compensate to some degree for the risk taking.  To my knowledge, these are not being considered in any of the lending programs.

Initially, I got no reply.  A follow-up query ten days later did generate a fairly perfunctory response from report author Josh Freed.  He noted that the paper "stands on its own," and suggested that I look at their website (he sent their main url, not links to specific pages) to find their thinking on nuclear and clean energy issues.  He did not respond to a single specific question. 

Note that in August 2011, Wendy Kiska and Deborah Lucas at CBO did a much more detailed look into subsidies associated with nuclear loan guarantees (see item 4 above), and found that the subsidies were substantially higher than the 1% placeholder value that Third Way referenced.  A half-billion dollar default on the Solyndra loan guarantee, use of subsidized credit to export jobs by electric car company Fisker, and the massive damages (and systemic cost increases to nuclear reactors around the world) from the Fukushima accident have all underscored that the loan guarantees Silver and Third Way have been advocating we distribute like candy really are high risk, expensive instruments for which funds are often deployed in ways different than what the policy wonks initially envisioned.  It is a lesson worth remembering.

1)  Don't Prop up USEC.  Henry Sokolski of the Nonproliferation Policy Education Center and Autumn Hanna at Taxpayers for Common Sense weigh in at the National Review Online on a proposed $2 billion dollar loan guarantee to finance new enrichment facilities for the United States Enrichment Corporation (USEC).  USEC is the privatized residual of the government-run Uranium Enrichment Enterprise that ushered in the US nuclear era.  In Another Solyndra: Ohio Republicans join the energy-subsidy racket, they argue that politics are leading the push of put taxpayer money at risk despite an extremely poor business case. 

The business case should matter far more than it seems to in Washington.  And this is so not just for each specific subsidy recipient, but also for how, in the aggregate, these interventions distort price signals and market structure overall.  

With so much focus on solar subsidies, it is useful to point out that even if USEC doesn't get the guarantee in the end, they've already scored up to $300 million in federal money to "help USEC reduce the technical problems that forced DOE to reject USEC’s original application" for a Title 17 loan guarantee.  That's bigger than the face value of many of the loan guarantees granted to renewable borrowers.

2)  Anybody got a light?  The effort to get the blaring light of fiscal conservative oversight now shining on Solyndra directed at least a tad towards the Vogtle nuclear deal proceeds on the dual tracks of litigation and legislation.  Legal action by the Southern Alliance for Clean Energy (SACE) and Taxpayers for Common Sense to expose the terms of the loans continues, as DOE produced only heavily redacted documents in response the last FOIA request.

Of particular interest to SACE is information revealing whether company officials played an inappropriate role in shaping the terms of the loan guarantee. Based on the limited information produced, it appears that the power companies had to put almost no skin in the game, promising to pay a credit subsidy fee of possibly as little as 0.5 or 1.5 percent of the total loan guarantee.

House Democrats have been pushing for greater oversight legislatively as well, with a letter drafted by Rep. Henry Waxman (D-Calif.) and co-signed by Reps. Ed Markey (D-Mass.) and Diana DeGette (D-Colo.) to Chairmen Fred Upton (R-Mich.) and Cliff Stearns (R-Fla) of the House Energy and Commerce Committee.  The letter notes that while they support a broadening of the Solyndra review to include 27 loan guarantees for renewable energy (something that has already been implemented), $10 billion in conditional guarantees to nuclear projects should also be included.  This follows up on a similar push by letter co-signer Ed Markey last month.

In my book, this one is simple: if you aren't willing to look at potential conflicts of interest and corruption in all of the projects, don't call yourself a fiscal conservative.

3) Cash is cash, or don't cry when we invest your money abroad.  Fisker Motors, recipient of a $529 million loan from the US DOE, is doing what any corporation does:  it tries to find capital at the lowest possible cost and deploy that money however it sees fit to meet its own internal objectives.  In this case, that means putting funds into manufacturing jobs abroad (or, per the input from Media Matters below, using the funding domestically to free up other funds to finance foreign manufacturing jobs).  Oops. 

On the other hand, as a major debtor to the firm, wouldn't taxpayers want Fisker to increase their chance of success as much as possible?  Or, if you want to see electric vehicles enter the marketplace, wouldn't you want to maximize operational flexibility as well?  I suppose that's the problem with having multiple objectives (is the loan for making jobs in the US or for trying to develop a new energy technology?). 

Media Matters points out that the overseas construction was known prior to the loan guarantee being approved, implying this controversy is merely a manufactured issue.  I disagree.  The example underscores the core point that promoters of big federal subsidies too often ignore:  in a global economy, building an industry from scratch doesn't mean it will all (or even mostly) be built here.

4)  Risk is risk, or don't cry when bankruptcy or dilution come to call.  The time for pricing risk is before you provide the credit.  Happy talk about guarantees not really being subsidies (yes, we're talking about you, Dick Myers) should always be ignored by taxpayers and Congressmen alike.

A.  The Belly-Up Club:  Beacon Power becomes member number two.  Flywheel producer (for bulk power storage) went belly-up today.  Taxpayers were on the hook for $43 million.  This, and Solyndra, will be good tests for the claims put forth by program promoters in years past that recoveries in bankruptcy will be substantial.  Let's hope so.

Recoveries aside, expect more members in the Belly-Up Club soon.  If we take the loan guarantee program to be what it really is -- investments with risks similar to venture capital or start-ups, expect failure rates of around 30-40%.  If you expand the outcomes to include failure plus no return, we're up to 70-80% of the pool, according to Harvard Business School senior lecturer Shikhar Ghosh.  Since Ghosh is talking private firms, and the incentive alignment within the Title 17 program between managers and the long-term performance of the firm is much worse, I'm expecting loss rates within the funded portfolio to be even larger absent big changes in the market (e.g., implementation of a large carbon tax).

B.  Diluting the feds.  Andrew Stiles raises concerns at the National Review Online that the restructuring of financing for Solyndra prior to its bankruptcy, a process that subordinated the Treasury's position in any subsequent bankruptcy, was illegal. He links to a series of e-mail chains on the restructuring, which are quite interesting in their own right:

• Discussion of subordination starts on PDF page 14.    
• Page 21 notes that since July 2010 DOE was refusing to provide information on the Solyndra loan guarantee even to Treasury (which, of course, was backing the financing).  This type of behavior underscores the concerns I had with program transparency and accountability back in 2007.
• Page 22 indicates that Lazard was the firm providing independent review to DOE, perhaps of the original deal or perhaps only for strategic options for Solyndra at that point in time.  There has been very little visibility on who the financial advisors to DOE have been on the Title 17 program, and therefore on the real or potential conflicts of interest these advisors may have.  This is a problem.
• Page 29 raises the intriguing possibility that investors may have been interested in keeping Solyndra alive longer to allow them to strip more assets from the firm (thereby reducing the government's collateral). Artificially high discounting of accounts receivable was one area mentioned.

While the lawyers will toil back and forth on the legality of subordination under the Title 17 authorizing legislation, to a great degree (and assuming there was no fraud or gross negligence within the government in the restructuring) it seems besides the point.  If the government wants to do high risk investments, those investments go bad with surprising regularity.  Any new money won't go in at the old terms.  Either accept the risk of dilution, or don't play in the market.

Defenders of Title 17 energy loan guarantee programs periodically point to the many other areas of the economy in which the government makes direct loans or guarantees.  They use the other programs as evidence for two main points: that the government is experienced and skilled in leveraging public credit to support private activities; and that what is being attempted in the energy sector is no different from what lots of other industries already get.  A recent commentary by Mark Muro and Jonathan Rothwell on the Brookings Institution web site makes this argument, pointing out that

The U.S. government runs some 70 loan guarantee programs and 63 lending programs that catalyze the financing of everything from transportation infrastructure and rural housing to science parks. More than $3 trillion of taxpayer money is at risk in these programs...

It is true that like all of these other programs, the energy credit support boosts the available financing for targeted projects.  However,  Title 17 is by no means comparable to a college loan, farm mortgage, or even the majority of export credits.

• Scale.  The Solyndra guarantee was for more than $500 million; most of the DOE guarantees are in the hundred million dollar range or above.  Those for nuclear power range from $2 to $8 billion in credit exposure for a single project.  This is dramatically different from other programs.  Average credit supports for OPIC and Eximbank, for example, are generally well below $50 million per project. Average venture capital investments in the energy sector were also much smaller, generally less than $10 million per round.  Table 5 (below), excerpted from a detailed review I did of subsidies to nuclear power earlier this year, provides more resolution comparative scales.
• Technology risk.  All federal lending programs face some risks of default, due to changing markets or economic conditions of the borrower.  However, the energy credit programs also face a tremendous amount of technology risk.  The instruments are priced as though they were run-of-the-mill projects being financed.  In reality, however, the unproven technologies make them more akin to venture capital than to a standard project finance loan.
• Concentration of risk.  As the scale of credit risk for individual deals rises, the impact of single defaults on the overall portfolio performance become increasingly important.  Title 17 offers far less ability to use a mixed portfolio of commitments (e.g., a diversified mix of geographic locations or industry types) to offset the risks associated with single loans than exists for other programs (OPIC for example) that have a larger number of smaller scale, more diversified lending commitments.  Furthermore, many of the supported projects face large systemic risks from events beyond their control.  Chinese subsidies to solar put at risk many of the supported solar projects.  Natural gas fracking (driving power prices down) and the Fukushima accident (driving nuclear power prices up) put at risk the ability for any of the proposed nuclear projects to be competitive. 
• Poor transparency.  Very little is known about the terms of the deals being struck, how loan guarantee "winners" are being selected by the small number of people involved in decision making, and potential conflicts of interest.  How closely do the number of actual jobs created by a guaranee match the job creation claims on the application?  On what basis was the credit subsidy on the loan calculated?  Does the federal government have an equity participation should the high-risk investment pay off?  Do any of the specialists involved in vetting the loan guarantees or the credit risk have conflicts that would bias their input?  Surely there are ways to make much more information known to the public without revealing confidential business information.  The Solyndra bankruptcy will hopefully lead us in that direction.

Finally, Muro and Rothwell suggest that despite the bankruptcy, there is a possibility that the taxpayer will be made whole.  They underscore this point by reporting an asset value for the firm that exceeds the loan guarantee amount.  Yes, the feds may get something.  But we need to be realistic here:  if liabilities didn't exceed assets, the firm wouldn't have declared bankruptcy.  This means that the total debts of the firm go well beyond the federal loan guarantee that is attracting so much attention; and that the federal government is not the only creditor.  Taxpayers will share in whatever is left on an equal basis (pari passu) with other creditors of a similar rank in the bankruptcy; original proposals to give DOE first access to assets in a bankruptcy were eliminated as the proposed rules for the program went final.  Further, pre-bankruptcy asset values are often steeply discounted once the firm ceases to be a going concern, likely reducing recoveries still further.

Source:  Doug Koplow, Earth Track, Inc. Nuclear Power: Still Not Viable Without Subsidies, (Washington, DC: Union of Concerned Scientists), 2011.

Congressman Ed Markey (D-MA) sent an interesting letter to Fred Upton (R-MI) late last week.  The correspondence outlined some of the history of the Title 17 loan guarantee program and the nuclear industry's push to make it their own.  It also included examples of the role the Nuclear Energy Institute played to weaken federal recourse in a loan default, and the pressure it brought to bear to expedite loans to its members.  These are indeed crass examples of political lobbying that put billions (and potentially tens of billions) of dollars of taxapayer money at risk. 

However, the most troubling element of this event to me was the political intervention with OMB's traditional role in financial oversight of federal programs by then-Senator Pete Dominici.  This is from Markey's letter:

Additionally, at the July 26, 2007 Senate Budget Committee hearing on the nomination of Congressman Jim Nussle to be the Director of the White House Office of Management and Budget (OMB), then-Senator Peter Domenici raised the pace and problems associated with DOE's implementation of the loan guarantee program:

"But OMB has been dragging their feet and I do not know which cabinet members have been involved.  I surmise as of now the Secretary of Treasury is himself involved.  But I can tell you, Mr. Nussle, that this is one of the most important provisions of the Energy Act.  It should have already been done and it should have had $25 billion to $30 billion in the loan guarantee fund.  It is still not ready and the recommended amount by OMB is $9 billion.  That will not fly...It seems to me all the work that has been done, you have got about 48 hours, to sit down and get this fixed."

On August 2, 2007, Senator Domenici lifted his hold on Mr. Nussle's nomination and voted to confirm him after receiving "a commitment from the Office of Management and Budget to fulfill the vision of Congress with regard to the Department of Energy loan guarantee program."

As I noted in my earlier blog post on Solyndra, this default is not just about subsidies to one industry or another.  It is about what role governments should play in the marketplace; and whether we are able to set up governmental structures that align the incentives of parties properly, and that both establish and retain appropriate checks and balances to reduce the risk of corruption and taxpayer loss. 

Domenici has always felt passionate about nuclear power in this country.  Yet even if we grant him that his promotion of nuclear has been rooted only in his belief of what was good for the country, his actions are inexcusable.  Undermining the program structure for something he likes creates flaws that quickly spread more widely to all sorts of programs, bleeding the country in the process.  Will the appointment of competent fiscal management for OMB now rest upon the whims of key Congressional members pushing for OMB to reinterpret financial reviews in their favor?  What other tests for how many other positions will crop up in its wake?  Parochial interests can very quickly corrode the basic structures we need to govern effectively if they are allowed to run unchecked.

In the Solyndra bankruptcy, Congressman Upton has been given an opportunity to put the loan guarantee program overall under scrutiny that was not possible back in 2007.  There are records of decisions, a number of commitments, and a broader context of financial failure and recession against which to judge the initiative.  Because I know the Congressman cares about the country, he would do us all a service to ensure his review looks not only at Solyndra, but at the way the other deals were struck as well.  That includes the the $10.3 billion in nuclear deals that Congressman Markey has asked be reviewed, and of course the next largest single commitment as well -- $5.9 billion to Ford Motor Company. 

Under the terms of Title 17, many of the borrowers must pay advance funds to cover their "credit subsidy."  This has been roughly estimated as the probability of default times the net losses to the feds (after any recoveries in bankruptcy) should one occur.  The industry has consistently pushed for lower credit subsidies, arguing that not only did their deal have a low risk of default, but even if it did default, taxpayer recoveries in bankruptcy would be high.  The Solyndra bankruptcy provides a real-world case study to put test these claims.  Congressman Upton's review of Solyndra should look very carefully at how high those recovery rates really are.  Will they be 50% of the investment?  25%?  Close to zero?  This will provide quite important information by which we can judge credit subsidy estimates in any future deals.

Ben Gemen over at The Hill describes as "hardball" the effort by House Republicans to bring to light documents and decision making behind a $535 million loan guarantee for a new facility to be built by Solyndra. Hardball is appropriate for an unprecedented level of taxpayer exposure for investment into individual, privately-owned assets. 

I hope the Congressional effort is successful in teasing out real documents that would allow real oversight of DOE's loan guarantee program.  DOE's Loan Programs Office has been notoriously resistant to transparency, despite operating at a scale that already runs into the tens of billions of dollars of commitments ($39.8 billion as of July 2011).  Proposals to extend this federal-financing approach through a "clean energy" bank of sorts have been floated with figures in the hundreds of billions. This is not a program to be glossed over.

Gemen reports that

In a letter to [Rep. Cliff] Stearns Tuesday, OMB Deputy General Counsel William Richardson, Jr. notes that OMB "made available" 1,400 pages of emails and attachments this week, which follows hundreds of other pages made available earlier.

It is impossible from the outside to tell how material this information is, and whether the critical items on risk management, potential conflicts of interest, and likelihood of market success have been provided. 

Nonetheless, I'm guessing that the data dump on Solyndra is about 1,400 pages more than what has been provided for DOE's commitment to the Vogtle nuclear power project in Georgia.  At roughly $8.3 billion (which is really a direct loan, as program rules require a loan of this scale come from the Federal Financing Bank), DOE's support for Vogtle is nearly 16 times as large as what taxpayers are risking for Solyndra.  Surely if a subpoena is warranted for gathering data on the Solyndra project, it is warranted for Vogtle as well.

I have been critical of the weak structure of DOE's foray into large scale loan guarantees for energy infrastructure since the program's inception.  It is not as though the Department has a robust and successful history of this type of capital deployment.  Here are the my formal comments to DOE on the proposed program structure back in 2007.  They were ignored then; DOE focused mostly on loosening program rules during that round of comments based on input from interested investment banks, firms that did or would represent many of the beneficiaries of the guarantee program itself.  Some of these banks (e.g., Merrill and Lehman) imploded soon after due to the very types of conflicts of interest and weak oversight that remain a concern in the DOE lending initiative. 

Though DOE remains under pressure to push money out the door, and in the process continues to ignore most of these structural issues today, the problems -- and the financial exposure -- remain.  It would be a service to all taxpayers if Cliff Stearns extended his interest in fiscal prudence and oversight beyond a single project and to the program overall.

Obama's 2012 budget proposal, released today, continues his multi-year push to boost subsidies to nuclear power.   He continues to push for $36 billion in new loan guarantees for nuclear new-build.  Outside of macro-economic meltdowns these guarantees represent some of the largest government subsidies to single, privately-owned industrial facilities in our nation's history.  Nonetheless, they have been a recurring request by the Administration, so really aren't that big of a surprise.

Tucked in the same paragraph, the budget proosal also requests "an additional $200 million in credit subsidy to support $1 billion to $2 billion in loan guarantees for innovative energy efficiency and renewable energy projects..."  This is quite important, as it provides a data point on the the expected credit subsidies associated with DOE's Title 17 energy loan guarantee program:  10-20% of the loan's face value.

The much larger scale of new nuclear reactors, combined with quite poor historical cost performance of new completions in the US, suggest credit subsidy rates for the nuclear commitments should be even higher.  Nuclear comes under Title 17's self-pay provisions, meaning the credit recipients would need to kick in these amounts as default premiums in advance.  Look for DOE to downplay nuclear default risks dramatically here, rather than upholding the letter and spirit of the Title 17 program in protecting taxpayers.  

Other energy-related items of note in the budget:

• Increased nuclear R&D, including into the latest industry fad for small, modular reactors.
• Increased public funding to decommission old enrichment sites.
• A positive push to eliminate a number of fossil fuel subsidies, worth an estimated $4 billion/year.  Though he targets only a partial list of existing subsidies to fossil fuels, it is nonetheless a good step.  Note, however, that Obama subsidies to carbon capture and sequestration work counter to the objectives of phasing out subsidies to fossil fuels.
• Shifting to a reverse-auction (lowest subsidy wins) for advanced biofuels.  Again, this has the potential to be innovative, though with some significant caveats.  First, if auctions do not properly integrate life cycle environmental impacts, auction winners may worsen core problems with biofuels and landuse.  Second, if auctions are layered on top of massive subsidies already in existence for biofuels, the lowest bid could simply reflect the fuels with the largest other sources of subsidy, rather than any inherent competitive attributes.  (Both of these issues are significant problems with Clean Energy Standard proposals as well).  Third, it is not clear how one would implement the reverse auction approach without interacting with the similar operations of the Renewable Fuels Standard (lowest RIN prices win market share). 
• Converts $7,500 per vehicle tax credit for purchasing electric cars to a much more valuable rebate.  Citizens not earning enough income to use this type of tax credit would be unlikely to buy the more expensive electric vehicles in the first place.  Thus, the main beneficiary of this change is likely to be wealthier purchasers who were seeing their credits reduced for other reasons (e.g., the Alternative Minimum Tax).  The budget proposal does not seem to change the rules of what vehicles can earn the credits; if they removed existing limitations per manufacturer, the overall subsidy cost of the program would likely surge.

Tomorrow's event (November 30th), titled Department of Energy Loan Guarantees: Should Taxpayers Bear the Risks for the Energy Sector with Loan Guarantees? A Conservative Take, looks to be an interesting one tomorrow.  The discussion brings together panelists from the Heritage Foundation, the National Taxpayers Union, the Competitive Enterprise Institute, and the Nonproliferation Policy Education Center to provide views on multi-billion dollar loan guarantees to conventional and renewable forms of energy.

While conservative groups generally support property rights and competitive markets, some of the participants have also opposed elimination of subsidies to favored energy industries in the past.  Hopefully that is now changing.

More information and registration information can be accessed here.

Update:  See a December 8th joint letter issued by most of the organizations involved with this event encouraging Congress not to increase the loan guarantees to new nuclear power plants.  The letter notes that

Putting the full faith and credit of the U.S. government behind costly, risky projects that the private sector won’t finance is fiscally reckless and politically unwise. Because of the size of these nuclear reactor projects, taxpayers stand to lose more on these than any other Title XVII loan guarantee. Congress must face the reality that loan guarantees are anything but “free money” or a wise expansion of government authority and oppose further expansion of this program.

The Heritage Foundation was the only organization participating in the November 29th event that did not sign the letter.  No reason this is given on the Heritage or Taxpayers for Common Sense websites. 

In April of this year, Jack Spencer of Heritage clearly stated in Congressional testimony that these energy loan guarantees are both subsidies and distort market behavior in many unhelpful ways.  He supported more stringent guidelines on nuclear loan guarantees, as well as caps on the total taxpayer exposure.  However, he appears to support a substantially higher cap on loan guarantees to nuclear than the other groups, and this may have been the basis of disagreement.