The rapid expansion of the Department of Energy’s loan program office could cause it to “cut corners” and fund projects that it otherwise wouldn’t, according to a new report from DOE’s inspector general.
The Biden administration has significantly increased funds disbursed by DOE through laws like the bipartisan infrastructure law, the CHIPS Act and the Inflation Reduction Act. Those laws have increased the office’s loan authority to over $400 billion, according to the IG report.
But pressure to lend out the money under deadlines could lead to inadequate reviews of applications, the report said. Roughly $290 billion of loan authority will expire in September 2026 along with an additional $50 billion in 2028.
“The pressure to beat these deadlines introduces the risk that the LPO will enter into loans it otherwise would not…because of insufficient time to conduct rigorous due diligence, and to consider alternative projects that might offer a more favorable risk profile,” said the report.
