July 6, 2022

Report Calls for Changes in the Energy Department

On Tuesday, the department’s inspector general, Gregory H. Friedman, issued a report calling for a wholesale restructuring of the department’s far-flung laboratories and other operations. He warned that “painful” staff reductions were certain to come as Congress sought deep federal budget cuts in the months ahead.

In one of his more striking criticisms, Mr. Friedman wrote that the department spent nearly $13 billion a year to run 16 separate laboratories but that only about half of that money went toward actual research, with 49 percent paying for overhead and capital spending. That ratio is “out of sync,” he said, and could be improved by combining some operations. The report noted that the Energy Department has three centers for nuclear weapons work, two for Navy propulsion reactors, five for energy technology and 13 for general science. “The department’s research complex is organized essentially as it has been for over a half-century,” it said.

Mr. Friedman called for the creation of an independent panel to examine ways of consolidating the labs.

The Department of Energy, whose origins date from the development of the nation’s atomic weapons program during World War II, was formally created in 1977 by the Carter administration. It has since grown into one of the government’s chief sponsors of advanced research and was one of the largest recipients of stimulus money — $35 billion — in the early months of the Obama administration.

The department has an annual budget of about $24 billion, not counting the one-time stimulus grants, and oversees more than 115,000 workers, including federal employees and contract personnel.

The agency has drawn heavy criticism in recent months for its handling of some green energy projects financed with stimulus money, particularly the loan guarantee to Solyndra, a solar equipment company. The report recommended that the loan guarantee program be placed on a department “watch list” of significant issues.

“Given the significance of the funds involved and the government’s exposure to risk, we believe that heightened and continued focus on this program is necessary,” Mr. Friedman wrote.

His report said that to save money and reduce duplications of effort, the department should also reabsorb the agency that handles nuclear weapons, the National Nuclear Security Administration, which was made a separate organization in 2000 because of security concerns.

Similar recommendations for other departments are likely to emerge as Congress moves to cut domestic spending. A report from a special Congressional committee drafting a plan to cut the deficit by $1.2 trillion to $1.5 trillion over 10 years is due this month.

The Energy Department had no immediate comment on the new report. But the Republican chairman of the House Energy and Commerce Committee, Representative Fred Upton of Michigan, said, “The broad concepts make a lot of sense.”

The report also warned that the department would probably also be forced to cut the $6 billion it spends each year on cleaning up pollution left over from nuclear weapons production. What money remains should be spent on the worst contamination, and not allocated by the state-by-state agreements now in force, it said.

The cleanup program involves two million acres in 35 states and employs more than 30,000 workers.

The inspector general warned that changes in the department’s organization could “have a significant impact” in states like Idaho, New Mexico, South Carolina, Tennessee and Washington, where department facilities and contractor operations are among the largest employers.

Article source: http://feeds.nytimes.com/click.phdo?i=82047c8c570833767d4b6db51057e343

Report Calls for Energy Dept. Changes

On Tuesday, the department’s inspector general, Gregory H. Friedman, issued a report calling for a wholesale restructuring of the department’s far-flung laboratories and other operations. He warned that “painful” staff reductions were certain to come as Congress sought deep federal budget cuts in the months ahead.

In one of his more striking criticisms, Mr. Friedman wrote that the department spent nearly $13 billion a year to run 16 separate laboratories but that only about half of that money went toward actual research, with 49 percent paying for overhead and capital spending. That ratio is “out of sync,” he said, and could be improved by combining some operations. The report noted that the Energy Department has three centers for nuclear weapons work, two for Navy propulsion reactors, five for energy technology and 13 for general science. “The department’s research complex is organized essentially as it has been for over a half-century,” it said.

Mr. Friedman called for the creation of an independent panel to examine ways of consolidating the labs.

The Department of Energy, whose origins date from the development of the nation’s atomic weapons program during World War II, was formally created in 1977 by the Carter administration. It has since grown into one of the government’s chief sponsors of advanced research and was one of the largest recipients of stimulus money — $35 billion — in the early months of the Obama administration.

The department has an annual budget of about $24 billion, not counting the one-time stimulus grants, and oversees more than 115,000 workers, including federal employees and contract personnel.

The agency has drawn heavy criticism in recent months for its handling of some green energy projects financed with stimulus money, particularly the loan guarantee to Solyndra, a solar equipment company. The report recommended that the loan guarantee program be placed on a department “watch list” of significant issues.

“Given the significance of the funds involved and the government’s exposure to risk, we believe that heightened and continued focus on this program is necessary,” Mr. Friedman wrote.

His report said that to save money and reduce duplications of effort, the department should also reabsorb the agency that handles nuclear weapons, the National Nuclear Security Administration, which was made a separate organization in 2000 because of security concerns.

Similar recommendations for other departments are likely to emerge as Congress moves to cut domestic spending. A report from a special Congressional committee drafting a plan to cut the deficit by $1.2 trillion to $1.5 trillion over 10 years is due this month.

The Energy Department had no immediate comment on the new report. But the Republican chairman of the House Energy and Commerce Committee, Representative Fred Upton of Michigan, said, “The broad concepts make a lot of sense.”

The report also warned that the department would probably also be forced to cut the $6 billion it spends each year on cleaning up pollution left over from nuclear weapons production. What money remains should be spent on the worst contamination, and not allocated by the state-by-state agreements now in force, it said.

The cleanup program involves two million acres in 35 states and employs more than 30,000 workers.

The inspector general warned that changes in the department’s organization could “have a significant impact” in states like Idaho, New Mexico, South Carolina, Tennessee and Washington, where department facilities and contractor operations are among the largest employers.

Article source: http://feeds.nytimes.com/click.phdo?i=82047c8c570833767d4b6db51057e343

Solyndra Executives to Invoke Fifth Amendment Rights

The chief executive of Solyndra, Brian Harrison, and Bill Stover, the chief financial officer, hired lawyers in preparation for the hearing this week before the House Energy and Commerce committee and got advice not to say anything, according to a representative of the lawyers.

The offices and the homes of some executives of Solyndra, a California solar-panel manufacturer, were recently raided by the F.B.I. as part of a criminal inquiry into the bankruptcy. The company said in a statement that it was “not aware of any wrongdoing by Solyndra officers, directors or employees in conjunction with the DOE loan guarantee or otherwise.”

In the wake of the bankruptcy filing, the Republican leaders of the committee asked the Department of Energy on Tuesday not to rush to give out loan guarantees for clean-energy projects in the final days of the program. But the department said it had already weeded out the projects that it would not have time to finish by the deadline, Sept. 30, and would press ahead with the others.

Republicans maintain that the department rushed through the approval of the loan to Solyndra for political reasons. They have released internal Obama administration e-mails that show that the White House was eager to have Vice President Joseph R. Biden Jr. announce the deal in part because it would show action on creating jobs.

The committee chairman, Representative Fred Upton of Michigan, and two subcommittee chairmen wrote to Energy Secretary Steven Chu that his agency’s haste had hurt “the quality and comprehensiveness” of the due diligence performed by the department and the Office of Management and Budget, which had to sign off on the loans. The department has been approving new loans at an accelerated pace in the last three months, the Republicans said.

“We are concerned that another rush to meet stimulus deadlines will result in DOE closing these deals before they are ready,” the chairmen wrote.

According to the Energy Department, 18 loan deals have been completed, for a total of $8.5 billion, and there are “conditional commitments” for 14 other projects with a total value of $9.3 billion. The department said in a statement, “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.”

It added, “Every agreement in our portfolio has undergone many months of extensive review and evaluation before a conditional commitment is signed.”

Article source: http://feeds.nytimes.com/click.phdo?i=d3aba3ad040247845e6176e48c7298a4

NRG Abandons Project for 2 Reactors in Texas

But the project — planned by NRG, a New Jersey-based independent power producer, and its minority partner, Toshiba — was in considerable doubt even before the accident at Fukushima began on March 11. Texas has a surplus of electricity and low prices for natural gas, which sets the price of electricity on the market there.

The project could go forward if circumstances changed, said David Crane, the chief executive of NRG, but he said the prospect of that occurring was “extremely daunting and at this point not particularly likely.”

The plan was for the South Texas Project 3 and 4 reactors, and was identified more than two years ago by the Energy Department as one of the four candidates for loan guarantees that were authorized by the 2005 Energy Act.

It is the second of the four to die; Calvert Cliffs 3, in Maryland, seems unlikely at this point, because Constellation Energy could not reach financial terms with the Energy Department. The department has granted a conditional loan guarantee to one project in Georgia and may give another to a project in South Carolina.

In a conference call with investment analysts on Tuesday evening, Mr. Crane said that to proceed with the project, the federal government would probably have to institute a “clean energy standard” that would create quotas for nuclear power, as states have already done for wind and solar.

He said that Toshiba, which is writing off $150 million for the project, would continue to pay to proceed with a license application with the Nuclear Regulatory Commission for the time being, on the chance that a new investor could be found. But, he said, “we have concluded that financially, this is the end of the line for us.” If the plant goes forward, he said, “it will have to be funded by somebody else’s resources.”

The public’s appetite for nuclear power projects resembles the situation right after the Three Mile Island accident of 1979, said Charles A. Zielinski, a lawyer in Washington who is a former chairman of the New York State Public Service Commission. Companies now factor in the prospect of higher construction costs, mixed with a slack demand.

The South Texas Project “may have been on the fence already, and Fukushima pushed it over,” Mr. Zielinski said.

Tom Smith, an organizer in Austin with Public Citizen and a longtime campaigner against the project, cited higher construction costs and uncertainty after the Fukushima accident.

“The wheels are starting to fall off the nuclear renaissance,” he said.

Article source: http://feeds.nytimes.com/click.phdo?i=c06ff55359021e0278065708e545c077