Energy Department May Struggle to Spend Stimulus, Senator Says

Feb. 9 (Bloomberg) -- The U.S. Energy Department, slow to issue funds in the past, may not be able to handle an estimated $40 billion in new energy spending from the economic stimulus plan, Senator Lisa Murkowski said.

Murkowski, the senior Republican on the Energy and Natural Resources Committee, said the new spending would almost double the annual budget of the department, which received $24 billion for the 2008 fiscal year. The department’s inability to provide loans more quickly for carmakers is an example of its “chokepoints,” she said.

“You are really putting the department on fast-forward with an infusion of dollars of this size,” Murkowski, who represents Alaska, said in an interview today with Bloomberg News. “We are seeing every day other examples of how the Department of Energy is inhibited in their ability to spend out the dollars we have given them.”

Instead of counting on the Energy Department, Congress may create a “clean energy bank” to fund such investments, Murkowski said. She said she has been discussing the idea with Senator Jeff Bingaman of New Mexico, the energy panel’s Democratic chairman. Former Senator Pete Domenici, a New Mexico Republican, proposed such legislation last year.

“We do need to look to what some of the alternatives can be,” she said. “This idea of this energy bank I think is one that we need to explore further.”

The idea could be part of bipartisan energy legislation that may be offered in draft form by the end of May, she said.

President Barack Obama said today at a town hall meeting in Elkhart, Indiana, that the stimulus package would provide billions of dollars “for moving us toward a new energy future,” including helping to double the amount of renewable energy produced in three years.

Senate Vote

The Senate is scheduled to vote today on whether to close debate on the stimulus plan. Murkowski said she opposes the measure. A final vote could come tomorrow, after which the $780 billion measure would have to be reconciled with the House’s version, which totals $819 billion.

In addition to delays in the Energy Department’s loan program for more efficient vehicles, first authorized in 2005 legislation, Murkowski cited the lack of action on funds granted in 2007 for “smart grid” technologies to improve transmission- line performance.

Energy Secretary Steven Chu, who was sworn in on Jan. 21, said last week that he aims to issue loan guarantees for carmakers and car-part suppliers in one to two months. He also said he wanted to begin funding items proposed in the stimulus within six months of when it becomes law.

Murkowski cited a lack of financing expertise in the Energy Department, an idea seconded by Kevin Book, a senior analyst for Friedman Billings Ramsey & Co. in Arlington, Virginia.

While the Energy Department is renowned for its research and development of energy technologies, “I wouldn’t go there for a mortgage,” Book said in a phone interview.

Renewables Requirement

Murkowksi also said she opposes Bingaman’s plan for a federal requirement that 20 percent of electricity come from renewable sources by 2021.

“The 20 percent is going to be problematic,” she said, suggesting the goal should be 15 percent and that nuclear and hydropower facilities should be added to the definition of renewable energy sources.