of operations on your roof tops, is that correct? >> that is correct. >> so the program, the 1705 program in your particular circumstance, actually hasn't generated any stimulative effect, has it? >> well, congressman, if you don't mind, let me just give you a little bit of context to that. >> sure. >> because the program itself was -- is a four-year program designed to start on september 30th of 2011. and so if you look at -- >> thank you. it had to start -- the program required you to start september 30th of 2011? >> correct. and we had started construction at that point in time. but the overall program, amp program was largely to be done in years three and four of a four-year program. and so it would be, if you will, rolled out over time. >> i understand that. again, i'm not being critical of the program. i understand the difficulty of a supplier going bankrupt and the impact that can have on the

delay of the system. but the truth of the matter, mr. chairman, is this is a program that was supposed to create jobs right away. and it looks like it hasn't done a single -- hasn't created a single job in your particular circumstance. mr. crane, i understand there's 5,000 folks that work for your company, nrg, and i think that the report that i read said that the total amount of loan guarantees that y'all and your partners have on those three projects are roughly $5.2 billion. i congratulate you on employing 5,000 people, but i hearken back to ms. de rugy's comment about the ratio to the jobs and the amount in the equation, you know, i'm a simple country lawyer, but i can handle the math. i do 5,000 into $5 billion and i get $1 million a job. am i doing the math right on that one? >> well, first of all, i should clarify, maybe it was a flight of rhetoric. that was 5,000 people that work at nrg, full-time employees. the three projects you're talking about, and maybe you'll like this number more, is that

it roughly employs 4,000 people directly. >> i can assure you, i don't like that money more. >> but the indirect impact is obviously a multiple of that. but, you know, passas a ceo of company, the accounting is what policymakers like to do. >> mr. rakowich, would these projects have gone on, but for the 1705 program? >> congressman, the three projects that we were involved in absolutely would not have happened without the 1705 project. there's no way the island project would have happened. without the federal loan it may be one in five chance. the first solar cbsr 15, maybe 40% chance. the amount of money, congressman, the private sector did not -- i mean, contrary to what dr. de rugy said, the private sector market was not

large enough to do projects of this size. most of the banks involved in projects are european banks, and they have not been in the best condition in the past few years. >> let's talk about the cvsr project. i hope there's a second round of questions. you said it's a one chance of four of it going on. when did you all start the analysis and start planning for this particular project? >> congressman, one of the things that -- i'm sorry, but all three projects, nrg was not the initial proponent of the project. i actually can't answer the question on when the project started. >> when did you buy the project? >> on cvsr? >> yes, sir. >> we signed a purchase agreement in november of 2010. >> and how far along was the project at that time? >> well, the project was in the development phase. they had most of the permits, and they had a letter of intent with the government in terms of

the 1705 financing, which is a project of this size, we wouldn't get involved unless you had that letter of intent because we knew the private sector could not provide that size of loan. >> i understand. i've never done business in california. something for which i'm grateful. my understanding is it's not a quick process to get a developer permits and letter of intent for a project of this size in the state of california, would that be a reasonable statement to make? >> your generalization that california is a difficult place to permit every type of power plant is a true generalization. i would agree with that. a solar voltaic plant that doesn't use water has less issues, has no error omissions, but it has land issues. we weren't responsible for the permitting. >> i'm not suggesting that you are. i'm suggesting that somebody thought this project was going to go forward before the stimulus program was enacted in 1705. >> well, yeah.

i mean, sun power started the development of it. i don't know how they initially thought -- i would guess that they started development before the financial crisis. >> sure. >> it was not inconceivable that the private sector would have come up with a $1 billion loan. but believe me, after the financial crisis, there was no way the private sector was coming up with a $1 billion loan. >> thank you, mr. chairman. i hope there's a second round. >> yeah, we will have a second round. mr. rakowich, have you -- i just want to be clear, have there been any solar panels put on these rooftops? in the amp project? >> no, mr. chairman. as of right now, there is no -- >> so what have you done? mr. crane, in the first testimony i heard today, he said he hasn't drawn down any dollars. i understand it's a three or four-year phase thing. you're still approved, still going ahead, yet you haven't done any construction, actually put panels on the roof tops like you're supposed to do to get the loan guarantee from the department of energy? >> right, mr. chairman. again, i would, first of all,

let me just say that's almost by design. the first couple, 15 to 18 months, we did not project -- >> how much money did you get again from the department of energy? what's the loan amount? >> the total commitment is, i believe $1.4 billion. >> 1.4 just waiting there. you can use it whenever you want. god bless america. it's just right there ready for when you think you need it. that's a pretty good deal. mr. kelly's point, that's a pretty good deal. >> with all due respect, i think -- let me just explain the way the project works. first of all, we go out and we identify utilities that are looking to sign power purchase agreements. >> have you done any construction at any part of phase one? have you done anything? any construction at all in the phase one part of the program? >> yes. we prepared the 15 roofs in southern california for solar in the future. >> you prepared them, but no panels have been put up? >> no panels have been put up on those roofs.

>> have you contacted fitch for a follow-up rating yet? >> we don't have a project at this point in time to be rated. >> have you purchased any solar panels? >> we have not purchased any solar panels. >> you don't even have any waiting, let alone put them up? >> we have not purchased -- >> i would like to enter for the record, and we can give you a copy of this e-mail from our stap to a lawyer from bank of america, where we just asked them some questions regarding the project amp, this project, four different questions. ppa has been signed yet, purrlogus signed any documents. they said no to every one of those. yet you still get to keep the money. it's still sitting there. this is amazing. this is clear back in march. obviously you were supposed to be moving by this on september 30th. we'll give you a copy of this. without objection, i would like to enter this into the record. mr. crane, you've got three projects, three loan guarantees?

>> yes. >> and how much was the money again? >> how much -- >> total? >> the total amount of the loans? >> yeah. >> for those three projects? it's about $4 billion. >> and you received those solely on the merits of the project, this is as to dr. de rugy's point. there was nothing based on friends in high places and political connections, all based on the merits of the project? >> i believe so. >> have you been to the white house ever to discuss this issue and talk about how important these loan guarantees were? >> did i discuss the -- >> let me ask you first, have you been to the white house? >> yes, i've been to the white house many times. >> how many times is many times? >> between the bush white house and the obama white house, i'd say 14, 15 times. >> since the 1705 has been in place, how many times have you been to the white house? this administration, how many times have you been to the white house? >> i'd say six or seven times. >> who did you talk with when you were at the white house?

>> well, i was a part of a large group. once meeting with president obama. >> did you talk about this loan guarantee program when you met with president obama. >> we talked about climate change. >> who else have you talked with at the white house? >> vice president biden. there i spoke with him about the clean energy standard. but mainly, i spoke with carol brown or with -- once with valerie jarrett. that was all about the nuclear guarantee program. >> you guys are also involved with the bright source project as well, correct? >> that's ivan project. >> are you familiar with this e-mail? this was brought up in our last hearing when mr. woolard was here with bright source. the e-mail from mr. woolard to mr. silver at the department of energy asking him to edit and proofread a letter that bright source was going to send from mr. bryson to bill daley, white house chief of staff, are you familiar with this e-mail?

>> no. >> did you know about this? were you involved in any way with this e-mail being sent to the department of energy? >> i don't think i'm copied on it. >> pardon? >> i had nothing to do with this. >> nothing to do at all? didn't know about it? >> no. >> okay. did you talk to the white house in those seven visits you had to the white house, did you talk to anyone there about this project? >> never. i never spoke with anyone at the white house about this project, or any other renewable loan guarantee. only about the nuclear -- >> so you talked about energy issues in general. do you think it's maybe out of the ordinary, or not customary to have a company send an e-mail to the department of energy asking those folks at the department of energy, who are going to be responsible in determining whether you get the loan or not, do you think it's unusual for them to ask the department of energy to edit an e-mail -- excuse me, edit a letter that their chairman of the board was going to send to the white house chief of staff?

do you think that's unusual? >> well, i don't know. it's nothing that i've ever done. but whether it's unusual or not, i don't know what common practice is. >> you've been in the white house six times to talk about energy projects and you don't know what common -- >> well, i mean, i don't know -- >> do you think it's uncommon to get that specific and ask the person who's supposed to say yea or nay on a loan project that we would like you to edit this letter that our chairman is going to send to the white house chief of staff? >> i don't think i've ever personally sent an e-mail to the white house so i don't have a lot of experience in this area. >> maybe you didn't have to send one, you got to talk to him in person. i think the gentleman would now go to our second round of questioning and would yield to the ranking member for five minutes. >> thank you very much, mr. chairman. although members of congress from both parties have supported

1705 loan guarantees for projects in their districts, it now appears that some of my friends in the majority have had a change of heart. in a report published in march, the majority argued that d.o.e., quote, amassed an excessively risky loan portfolio, unquote. there are experts who do disagree with the majority's assessment. recognizing the inherent risk in emerging green technology loans, congress authorized to set aside $2.47 billion for potential losses in the d.o.e. 1705 loan guarantee program. according to several analysts, even after accounting for the collapse of solyndra and beacon power, the actual default rate on the d.o.e. loan guarantee program ended up being a fraction of what the government actually budgeted for the losses. bloomberg government also came to a different conclusion than

the majority. bloomberg's recent report beyond solyndra and analysis of d.o.e.'s loan guarantee program concludesed that the 1705 d.o.e. loan program, is predominantly lower risk projects. miss bronicki, do you agree that the project is excessively risky or lower-risk project? why? >> the three projects that they received the d.o.e. loan guarantee, very low risk project. there are sent out to many megawatts utilizing the same technology. it was only about ex spending geothermal, not innovation. >> i understand. but the risk was low, is that what i understand? >> very low.

>> as i understand it, one reason the portfolio can be considered low risk is because most of the projects that receive 1705 loan guarantees are for power generation. and d.o.e. required those -- these companies to have long-term agreements in place with nearby utilities to purchase the power once it was built. this means that the projects have a guaranteed income stream, which greatly limits any risk of default. now, mr. mancini, can you explain the difference between the power generation projects like the cogentrix loan guarantee and project finance deals? and do you already have agreements in place to sell power to major utilities, once the projects are completed? >> we do in the case of alamosa have a long-term power purchase agreement with the public service company of colorado. to purchase the power, that is one of the requirements of the

d.o.e. -- >> you couldn't do it if you didn't have some kind of agreement in place, right? it doesn't work financially? >> it would be very difficult. >> otherwise you would be stuck with a white elephant? >> there are very few of those projects that have actually succeeded without long-term contracts. >> the white house reviewed the d.o.e. loan program office, found the d.o.e. support of publ public/private partnerships in states like california, ensure that loan guarantee recipients have a steady and predictable funding source. mr. crane, do you agree with this assessment? mr. rock rakowich, it has yet to start generating solar energy. that fact is disappointing. can you tell us how much taxpayers' money has been drawn down by the project so far? >> zero, congressman. >> how has the project -- what was that answer? >> none. >> none, okay.

has the project amp loan guarantee designed to mitigate -- how was this loan guarantee designed to mitigate the risk of taxpayer losses? >> i would say three things. one, we're not going to move forward unless we have a long-term power purchase agreement, which is generally a 20-year agreement, 15 to 20-year agreement with the utility, okay? number one. the second thing is that we're not going to think about -- we're putting up the equity, or us and our financial partners are putting up all of the equity, as well the lender has 20% at risk that is not guaranteed. so nearly 40% of the project is at risk before the government -- >> okay. so -- >> and so we're not going to put up -- >> the question here is the performance. i think that it's clear that this program is performing better than expected in financial terms. one of congress' main goal is

creating the 1705 guarantee loan program was to spur technological advances in renewable energy technology. now, miss bronicki, do you believe your project is spurring technological advances? are you spurring technological advances with the program that has been financed by 1705? >> technological -- >> are you creating technological advances? >> not in this program. we are an innovative company in other programs. but this is the proven technology. >> mr. crane? >> yes. particularly the solar project is a huge technological advance. >> mr. mancini. >> the technology used in this project was used in the space program. but never deployed in a commercial scale, utility scale project. this gave it the opportunity to do that, and i am happy to

report it is operating successfully. >> i just want to say, mr. chairman, that when we have an isolated look at what the program has actually done, we have a program here that suggests it could be working within the context in which it was designed. on the other hand, there are legitimate questions that are raised by dr. de rugy about, you know, the risk involved. just in this case, it looks like it might be working. but i think that we still need to have some caution here. i ask unanimous consent, moments ago, mr. chairman, you made public the e-mail your staff received. i have documents that would refute that. two official d.o.e. documents. they certify that the commencement of construction and

refute the allegations that have been made. and i ask that these be submitted in the record. and i appreciate your consideration. >> without objection. >> thank you. >> mr. crane, i want to put back up this e-mail again. i'm just flabbergasted that we actually have an e-mail that the ceo of bright source, relative to ivan paul project, is asking the department of energy to proofread a letter that their chairman of the board, now commerce secretary, is -- plans to send to the white house chief of staff. and a couple of the highlighted things there, send me any comments or suggestions you think we can improve this message. definitely asking for edits from the department of energy. contained in the draft letter is the statement, dear bill, referring to the white house, we need a commitment from the white house to quarterback loan closure by march 18th. later on in the draft letter

that they're asking for edits and review of, they said, we need guidance and support from the white house. so this takes place in march of 2011. the loan guarantee is ultimately approved, i believe on april 11th, 2011. the seven visits you had to the white house, were any of them during this time frame, the spring of 2011? >> i would think that probably there were some. >> some prior to the april 11th, 2011, approval of the loan guarantee? >> i would think there actually would have been more before than after. >> more before than after. and this project is a big project. you had the big picture up there. this is one big deal to your company, and of course, bright source. >> mr. chairman, you have to understand two things. one is, this project, on that basis, we were involved but it is still basically bright source's project, number one. number two, this might seem like a big deal to you, but my focus was entirely on our nuclear

project in texas, which is five times larger than this project. >> bright source got billions of dollars. it's not a big deal to you at all then? >> if it didn't happen, we had not invested -- bright source was the developer of this project. you know, it was -- >> but you obviously got an interest. you're a partner with bright source in this project? >> well, now we are. now we have hundreds of millions of dollars invested. but as of march or april of 2011 -- >> so it's important now, but it wasn't important then? that's what you're saying. >> well, it was important to the people who developed the project, which is bright source. we had an opportunity to invest in the project. >> it was important enough to bright source, your partner, to have the department of energy do a, you know, check over their homework in a letter they were requesting to send to the white house chief of staff. it's pretty important. not important to you? >> at that time, if we had not had an opportunity to invest in that project -- >> just to be clear, just for the record, in any of those seven meetings you had with the

white house, and some taking place in the spring of 2011, you did not bring up the ivan pop project in this issue at all in the visit with the white house? >> absolutely, unequivocally not. >> you didn't know about the e-mail, or the draft letter and you didn't bring it up to the white house? >> that's correct. >> let me bring up another point here if i could. could we get the second e-mail up? just because i want to see this. i want to let the doctor comment on this one. so this is now an e-mail from prologus, mr. drew torbin, to kimberly at the department of energy. and this is going the other way. this gets right to the point of, when you get so close and you've got to grease the skids of government to get approval, but it says, we've made adjustments to the memo which we believe to accurately reflect the situation. we're talking about an internal memorandum. now we have outside folks -- pardon? this was just entered into the

record by mr. kucinich. we're thinking the same here, mr. kucinich. but now we have it going the other way around, where we have the department of energy having private sector edit and draft internal documents that are communicating within the department of energy. if the american taxpayers can see what's going on in this program, and i believe it was your third point, doctor, in your testimony, you talked about this is what happens when cronyism gets to this level, and this much money is at stake. >> when a lot of money is at stake for a company, whether it's direct cash or loan guarantees, which would basically give them, as mr. kelly said, lower rates, then they would get on the open market. i mean, it actually shifts the -- a lot of the incentive for the company itself to expand a lot of energy rather than to please the company. but to please the government, or actually to meet the standards expected by the government.

but i believe the reverse is true. i mean, there's a huge economic literature, public choice economics is all about the way the reverse is true, too, where the government designs programs in order to fetch some companies and some industries. so it goes both ways. >> i just find it amazing that on one hand we have a company saying, hey, edit this letter for us, that our chairman's going to send to the white house chief of staff, and then we also have, now, the department of interstate, hey, private sector, edit this internal memo we're going to send to folks in the department of energy. i mean, unbelievable. in my time in public office, i've never seen those kind of communications going on in a loan guarantee program, or for that matter, any program. i appreciate that. i'll yield now to the gentleman from pennsylvania, mr. kelly. >> thank you, mr. chairman. i know this can be uncomfortable. i don't fault you for taking

advantage of a government that continues in this dependence/co-dependent type of a model. and it's sometimes hard to walk away from it, once it's there. you say, well, it's just so easy, why wouldn't we do it. but it does come down to, what's the return on the investment for the people whose money is actually at risk? i think that's where the disconnect comes. people think, oh, it came from the government, it didn't hurt anybody. then you say where did the government get the money. and you find out it's from the people who's paying taxes. and you find out not everybody pays taxes. but for those who do, up where i live, a lot of people still carry a little lunch bucket. by the time they get done paying their school taxes, municipal taxes, state and federal taxes, there's just no money left for them to take care of their kids. and to plan their future.

and i think that's where the disconnect comes. we actually start to believe, this is free money. it's not free money. this is taxpayer money. mr. rakowich, how much money did cogentrix get? >> i'm sorry, i'm not with cogentrix. >> i'm sorry, i thought you were. i meant mr. mancini. >> the federal loan guarantee was $90 million. >> $90 million. do you know how many permanent jobs that created? >> we created directly approximately ten permanent jobs. >> ten permanent jobs? let me ask you -- >> but then -- >> not you, but you sitting at your kitchen table. you know what, we just made a $90.6 million investment. this is all about jobs. this whole initiative was about creating jobs. here's the good news. ten people. got jobs. is there any reason the american people no longer have faith in

what's going on in washington, d.c.? the disconnect is so great here, it is so foreign to people who live in this area, that this money actually comes out of working people's pockets. no, it's free. no, it's not free. this drives me absolutely nuts. can you imagine going to the bank and say i want to borrow $90 million, and say, i can hire ten people with that. they'll say, good to see you. please leave. i don't get this. miss bronicki, obviously you don't know a lot what's going on. this gentleman, mr. thompson, before he worked for you, he was an in-house -- he worked for mr. reid. anderson of cassidy and associates is a lobbyist for your firm, did you know that? >> yes. >> do you know who he worked for? he was harry reid's deputy chief of staff until 2005. so mr. thompson worked for harry

reid. mr. anderson worked for harry reid. i would assume mr. bronicki, is that your husband? >> my son. >> and he was a donor to the reid re-election campaign. there's nothing wrong with that. here's my point. this is not to embarrass you. when we follow this judas goat of taking money from the government, there are strings attached to all this money we take. and there's re purr cushions. it gets to the point people start to wonder, as i said earlier, this feeding frenzy to come after this money. how in the world did 25 of you get to the table and the others were left out in the cold? you start to look, how did they get there? you think, geez, the guys worked for harry reid, and the other guy worked for harry reid, and all of a sudden harry reid gets involved in it, and the money starts to flow. again, this is the tough part of you sitting there.

the american people have a right to know, how did this happen. >> if i may? >> absolutely. >> i sincerely believe that our project is one of the most fit projects for the program. it was well advanced. it was excellent construction, it started when we submitted the application. >> right. >> the financial markets were not available to provide financing for such projects in 2009. and this certainly accelerated the construction. >> i have no question about that. >> it enabled us -- >> i'm going to run out of time. it was a good project for your company. you're geothermal people. so it was a good project for you. but let me ask you. and mr. crane. bright source, aqua cal yan