Republicans Fear Energy Department 'Rushing' $5 Billion in Loans Ahead of Friday Deadline

Secretary of Energy Steven Chu gestures as he delivering a keynotes address at a conference in Beijing, China, Sept. 22. (AP)

The clock is ticking on the controversial loan program that supported bankrupt solar firm Solyndra. But Republicans are concerned the account could dispense more than $5 billion in additional clean-energy loans before a Friday deadline.

While the Department of Energy insists the projects are being properly vetted, some lawmakers are accusing the government of rushing to finalize the remaining loans in the pipeline.

"Solyndra was the product of a bad bet rushed out the door and taxpayers are now on the hook," said Rep. Cliff Stearns, R-Fla., chairman of the House Energy and Commerce oversight subcommittee. "We cannot afford (the Department of Energy) rushing out more Solyndras in these final hours."

The department on Wednesday approved two loan guarantees worth more than $1 billion for solar energy projects in Nevada and Arizona. The government completed a $737 million loan guarantee for Tonopah Solar Energy for a 110-megawatt solar tower on federal land near Tonopah, Nev., and a $337 million guarantee for Mesquite Solar 1 to develop a 150-megawatt solar plant near Phoenix.

The approvals follow statements by Obama administration officials that the government will continue to invest in renewable energy projects despite the controversy surrounding Solyndra. That company was green-lighted for taxpayer-backed loans in 2009 -- it filed for bankruptcy early this month after receiving $528 million in federal loans. The company is now the subject of several investigations.

Ahead of the Friday deadline on the loan program, the Energy Department still has seven projects left to finalize. The pending proposals include wind, solar and biofuel projects across the country.

Energy Department spokesman Damien LaVera said the two projects approved Wednesday had extensive reviews that included scrutiny of the parent companies' finances.

"We are committed to ensuring that every deal closed before September 30 is fully vetted and will not close any deal that has not received full due diligence by September 30," the department said in a statement Thursday. "We are not rushing to complete deals, we are using the full amount of time Congress allocated for the program so we can ensure that we fully complete all due diligence and make informed decisions based on the most recent data."

"It's important to remember that Solyndra, for example, was the first loan out of this program and that the program has continued and evolved as it's gone on," White House Press Secretary Jay Carney told reporters on Wednesday.

Energy Secretary Steven Chu also touted the latest loans as a way for the United States to stay competitive on the global energy market.

"If we want to be a player in the global clean energy race, we must continue to invest in innovative technologies that enable commercial-scale deployment of clean, renewable power like solar," he said in a statement.

Senate Majority Leader Harry Reid, D-Nev., is a strong supporter of the Nevada project, which he says will help his state's economy recover. Former Gov. Jim Gibbons, a Republican, also supported the project.

But Republicans in Congress are keeping a close eye on the program. Sen. Charles Grassley, R-Iowa, on Wednesday asked the office overseeing stimulus-law money whether it had any prior signs that Solyndra was in trouble and what it plans to do about the $528 million in funding that went to the company.

A government watchdog group said the Solyndra bankruptcy shows the need for greater oversight of all the department's loan guarantee programs.

"It is time for a full audit of their activities, their management and their results," said Tom Schatz, president of Citizens Against Government Waste, a Washington-based advocacy group.

"Candidly, it might be time for the federal government to rethink the whole idea of loan programs," Schatz added, calling the government's track record on loan guarantees "lousy."

The Associated Press contributed to this report.