The U.S. Department of Energy’s (DOE) Inspector General has urged the agency’s Loan Programs Office (LPO) to immediately pause issuing billions in loans for green energy projects. This follows an interim report released on Tuesday alleging potential conflicts of interest among contractors responsible for evaluating loan applications.
The report flagged concerns that some contractors may simultaneously serve both the DOE and potential borrowers, potentially undermining impartiality. The watchdog recommended suspending all new loans until the office ensures compliance with conflict-of-interest regulations.
The LPO oversees over $385 billion in low-interest loans aimed at advancing green energy technologies, including batteries, nuclear power, and advanced vehicles. The office has approximately $20 billion in remaining loan authority, with a record $15 billion conditional loan recently approved for PG&E, a California-based electric utility.
A DOE spokesperson dismissed the report, calling it inaccurate. “The Inspector General fundamentally misunderstands the implementation of contracting in the LPO. We stand confident in knowing LPO is in full compliance with the Department of Energy’s conflicts of interest regulations.”
Jigar Shah, head of the LPO, also pushed back, stating, “Despite a months-long audit involving over one hundred contract files, the Inspector General has not identified any organizational conflicts of interest.”
The Inspector General, Teri Donaldson, plans to issue a comprehensive report once the investigation concludes. Donaldson, appointed by former President Donald Trump, previously served as general counsel for the U.S. Senate Environment Committee and has faced criticism from some for her ties to Senator John Barrasso, a coal industry ally.
Despite the interim findings, the DOE has signaled its intent to proceed with its lending program as directed by Congress.