House and Senate Democrats are proposing the creation of a “Green Bank” that would help finance clean energy projects for the purpose of helping to move the U.S. away from carbon-based fuels and saving the world from climate change.
The initial cost: $10 billion. But the legislation they offered would allow the Treasury Department to issue up to $50 billion in new debt to launch the bank.
Rep. Chris Van Hollen (D-Md.) proposed the legislation this week, with the backing of Connecticut Democrats, and Sens. Chris Murphy (D) and Richard Blumenthal (D) offered a companion bill in the Senate. Connecticut has its own Green Bank, and Democrats from that state say a national bank would help promote green technology.
“The cheapest and cleanest energy is the energy we don’t use at all,” said Rep. Jim Himes (D-Conn.), a cosponsor of the House bill. “We have seen remarkable gains in the renewable and energy efficiency marketplace over the last several years, and it is important that the federal government provides incentives to allow the marketplace to continue to develop and thrive.”
While the bill could be discussed in the Democratic Senate, it would appear to be dead on arrival in the House, where memories of the failed Solyndra experiment still resonate in the minds of Republicans. Solyndra famously went bankrupt after burning through more than $500 million of taxpayer funding that was given in the hopes that the company could become a viable solar cell producer.
Under the bill, the Treasury Department would issue $10 billion in bonds to acquire stock in the new Green Bank. Treasury could issue up to $50 billion in debt to float the bank, and the bill anticipates $200 million in operating costs in the first year.
The Bank would provide loans, loan guarantees and other forms of financing for clean energy projects, with the explicit goals of achieving U.S. energy independence, “abating climate change,” and boosting energy efficiency. The bill also hopes this financial aid would help ease “the economic effects of transitioning from a carbon-based economy to a clean energy economy.”
Language in the bill says projects can be related to solar, wind, geothermal, biomass and other alternative energy sources, and it also includes nuclear power as an option.
In an apparent attempt to get around fears of another Solyndra, the Bank would only be able to direct financial aid to projects that are seen as “commercially reasonable” and in cases where private credit is not adequate.
However, even this language is likely to run into GOP opposition. Many Republicans said in the wake of the Solyndra bankruptcy that when private credit is not available for a certain project, there’s often a good reason.