July 18, 2012 08:53 PM UTC

Tipton Utterly Bombs Solyndra/Cogentrix Pop Quiz

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• by: Colorado Pols

On Monday, we talked about a tour by GOP freshman Rep. Scott Tipton of a major solar power plant in his district, Cogentrix, which was the recipient of a $90 million federal Department of Energy loan guarantee–a similar loan guarantee to that given to now-bankrupt Solyndra, now the subject of much scandalizing from Republicans against the administration.

As we reported on Monday, Tipton’s previous criticism of Solyndra didn’t stop him from enthusiastically declaring his support for Alamosa’s Cogentrix–even after officials from the company explained matter-of-factly that the DOE’s loan guarantee made the plant possible. Again, from that damningly celebratory press release:

Freeman explained the importance of their DOE solar loan guarantee, a program that is not popular within Tipton’s party in congress.”With an unproven technology, we couldn’t get a loan from a bank,” Freeman told the congressman. “This has made it a bit uncomfortable for us, but it is a poster project for success.” [Pols emphasis]

“I think it is impressive,” Tipton said [Pols emphasis] after learning about the technology and standing under one of the 28,000 square foot arrays Friday afternoon. “Here in the third district, in Alamosa County, we have the world’s largest solar facility and just look at the technology.”

Yesterday, we were forwarded a transcript of Tipton answering questions about the obvious problem with a Republican member of Congress celebrating an Obama administration solar loan guarantee. Correction: we were forwarded a transcript of Tipton attempting to answer questions about this. Because he didn’t actually appear to know what he was talking about.

Q: You had a chance to go to Cogentrix and look at their facility. That was funded-built in part because it had a loan guarantee from the Department of Energy. Do you think that program is worthwhile or would you vote to end that loan guarantee program that’s funded by Department of Energy?

SCOTT TIPTON: What I think we need to do is approach this as an example. We need to be incentivizing private loans, that are going through- when you’re having a loan guarantee if it’s going through a private entity, err, a non-government bank, if you will. We’ve got to make sure we’re not having the Solyndras of this world. Where we are pouring money literally down the drain. We’ve got to make sure that the members of Congress, and the different subcommittees and committees that are going to be dealing with it are making good & proper choices. Because when we’re dealing with exploratory technologies, particularly under Dodd-Frank right now, there is no access to capital, to be able develop those.

Q: Do you feel like the folks up at Cogrentrix could get access to capital, under…[Tipton interrupts]

SCOTT TIPTON: They have it. They have it. We just talked to them. This is coming through the private sector. There’s a difference between making a loan and making a guarantee. In the case of Solyndra, you make a guarantee and it goes bad, the American people pay for a bad choice. And so you better, you know, and, banks, they have loan committees that are supposed to be reviewing these. Government, if it were going to be making those type of guarantees for some developing technologies that are going to be there, they can get it from the private sector, and we can maybe encourage that, but it has to be done very judiciously.

Tipton seems to be basing this differentiation on the fact that Solyndra’s DOE-guaranteed loan was made by the Federal Financing Bank, which is a division of the Department of the Treasury. We haven’t seen where Cogentrix’s DOE-guaranteed loan is originating from, but we have no evidence to dispute that, as Tipton says, it’s “private sector” funds and not the FFB.

But folks, the loan is still guaranteed. Just like Solyndra’s loan, or for that matter your Stafford student loan. Both Cogentrix and Solyndra received their loan guarantees under the same provision in federal law–Title XVII section 1705 of the Energy Policy Act of 2005, and as the company’s CEO told Tipton, that’s the only reason why Cogentrix was able to obtain financing. Cogentrix, you see, is part of the 96% of loan funds distributed under this program that haven’t defaulted. But if Cogentrix (God forbid) were to go belly-up, taxpayers are on the hook.

Despite what critics say, the DoE’s guaranteed loan program is a successful program. The default rate for the loan portfolio is less than four percent. By comparison, the loan default rate for the Small Business Administration is nearly twelve percent, three times as high as the DoE’s loan program.

What we’re trying to say, as simply as we can, is that Scott Tipton has made a colossal fool of himself again, undermining one of the most-regurgitated accusations leveled by his party against the Obama administration in an election year. He really didn’t have much choice since the project is in his district, but his attempt to draw this bogus distinction is, well, bogus.