Head of contentious loan program to step down

By Hannah Northey | 06/10/2015 07:18 AM EDT

Peter Davidson, executive director of the Energy Department’s loan guarantee program, said yesterday that he plans to step down at the end of the month and is confident his successor will steer clear of thorny politics that have plagued the multibillion-dollar program in the past.

Mark McCall, managing director and chief financial officer of the equity firm Lime Rock, will replace Davidson in mid- to late July, Energy Secretary Ernest Moniz announced in a letter to staff. Dong Kim, the Loan Programs Office’s chief operating officer, will serve as acting executive director before McCall steps up.

Davidson said during an interview yesterday he met McCall, an investor, during his federal career and personally recruited him to lead the loan guarantee program. Davidson added that he plans to move back to Brooklyn, N.Y., to be with family.


"[McCall is] very focused on the next phase of our mission, which is to continue to keep it as a valuable program, to keep it de-politicized, to keep building up the pipeline and to drive the deals in our pipeline to a financial close," he said.

Davidson’s departure comes as Congress attempts to craft comprehensive energy legislation possibly including a flurry of bipartisan proposals aimed at reforming and expanding the loan guarantee program (E&E Daily, June 8). Davidson, who took the program’s helm in 2013 and jump-started the solicitation process that had lain dormant for years, said interest on Capitol Hill is a good sign.

"We’re very happy to see Congress talking about ways to expand the program and have greater use for the program. That’s a radically different position than we were in two years ago," Davidson said.

Moniz and Deputy Secretary Elizabeth Sherwood-Randall in the letter to DOE staff yesterday credited Davidson with restarting the loan program’s activities and many of the projects in its more than $30 billion portfolio, noting that 22 projects supported by the office are now operational and generating revenue.

"These projects currently produce enough clean energy to power approximately 1 million average American homes, have manufactured more than 8 million fuel-efficient vehicles, and have avoided carbon pollution equivalent to taking nearly 4.5 million cars off the road," Moniz said. "LPO’s portfolio of projects has already repaid $5.4 billion, including more than $1 billion in interest payments to the U.S. Treasury, which issued the loans guaranteed by DOE through the Federal Financing Bank."

Davidson touted the program’s recent success, noting that the loan program financed the first utility-scale solar projects that have since proliferated without federal support, as well as the first cellulosic ethanol biofuels facility, advanced reactors and electrification of light vehicles.

Looking back on his first year, he recalled ramping up public outreach, "dusting off the cobwebs" and maneuvering an internal process before being able to issue three solicitations, including $12 billion for nuclear, $8 billion for fossil energy and advanced fossil and $4 billion for renewables.

"We now have $24 billion of solicitations on the street for energy projects," he said, adding that $16 billion is available for advanced technology vehicles manufacturing.

Although the department has had no applications for the nuclear funds, Davidson said the agency has seen a "great deal of interest" for renewables and fossil energy that are moving through the vetting process, including some carbon capture and sequestration deals. "There’s no holdup at all, we’re moving things through very quickly," he said.

As for nuclear, Davidson said it’s no surprise there are no applications yet, noting that projects are massive and developers take six to 12 months to assemble an application for a loan guarantee.

Davidson also said he’s confident the program’s past success and McCall’s leadership will avoid prickly politics. The bankruptcy of past recipients including solar manufacturer Solyndra, Fisker Automotive Inc. and others fueled a frenzy of criticism and oversight hearings on the loan guarantee program.

"My whole hope is that the work we’ve done over the last two years is to significantly de-politicize [the program]," he said. "I think the fact that there hasn’t been so much rancor is proof of that."