Kevin Lamarque/ReutersU.S. Energy Secretary Steven Chu testifies during the House Energy and Commerce Oversight and Investigations Subcommittee hearing last year.
Energy Secretary Steven Chu rebutted Republican allegations that he pushed San Francisco-based Prologis to sign a deal with now-bankrupt Solyndra, saying instead that he was "nervous" about the venture because he knew then the solar panel deal was likely to fail.
"We weren't comfortable with Solyndra being the supplier," Chu told members of the House Energy and Commerce Committee at an Energy Department budget hearing in Washington, saying Solyndra's shaky finances in summer 2011 made it unlikely that it could meet the deadlines.
Prologis, a company that leases industrial and warehouse buildings, had sought the Energy Department's backing for Project Amp, a $1.4 billion electricity-generating plan that would put solar panels on more than 750 of its warehouse roofs. Prologis initially had agreed to have Fremont-based Solyndra supply the panels, but today, Chu told members of Congress he had second thoughts about using Solyndra, contrary to Republican assertions that he wanted a last-minute deal to save the doomed solar panel firm.
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"Prologis should have lined up a Plan B," Chu told lawmakers.
In the end, Solyndra filed for bankruptcy before the Project Amp deal was finalized in September 2011.
The proposed 20-megawatt deal would have been a lifesaver for Solyndra. It was worth more than $80 million, more than a third of the company's expected 2011 sales. Republicans claimed Solyndra was in line for the deal because its top investor, George Kaiser, was a campaign bundler for President Barack Obama.
But Chu said today that was not the case. He said the Energy Department was well aware of Solyndra's financial difficulties when the Prologis deal was proposed in June 2011 and didn't want Solyndra's problems to hurt Project Amp. The deal went forward last year with NRG Energy and Bank of America as partners. Chu didn't say today whether he personally intervened with Prologis.
James Larkin, a spokesman for Prologis, said in an interview that the company entered into negotiations with Solyndra in February 2010 and that the Energy Department wasn't involved.
"Prologis had selected Solyndra as a partner approximately nine months before submitting its DOE loan guarantee application," he said.
Project Amp did have the backing of Chu, who wanted to use vast arrays of solar panels atop low-slung industrial buildings to supply power not just to the facility itself, but also to the nation's electricity grid. Nearly 1,000 construction jobs were expected to be created from the project, which would have installed more photovoltaic capacity in one project than all of those completed in the U.S. in 2010.
But Republicans claimed that Chu intervened with Prologis to benefit Solyndra. They cited a May 6, 2011, credit paper from the Department of Energy's loan programs office credit review board that waived Solyndra's capital requirements for the deal. That document explained that Solyndra's panels would be used exclusively in the the first phase of Project Amp, known as Project Photon, to sell megawatts of electricity generated by the panels to the grid, with Southern California Edison as the buyer. A megawatt can supply power to about 800 to 1,000 single-family homes.
Republicans also pointed to a Aug. 18 e-mail from Brian Harrison, Solyndra's CEO, to an executive at Argonaut Ventures, Solyndra's biggest investor.
"I believe DOE is desperate to get (Project) Amp to happen," Harrison wrote. "I think they have linked Phase 1 of Amp, which is Photon to the project success. Solyndra asked for this months ago to ensure Photon happens. If we don't ship to Photon then I think there may be some negative implications for Amp that DOE is urgently trying to avoid."
The Energy Department says that Chu merely was being supportive of Project Amp and that Prologis and Solyndra entered an agreement on their own, without the secretary's urging.
"The secretary's support for Project Amp had nothing to do with Solyndra," said Damien LaVera, an Energy Department spokesman. "Secretary Chu strongly supported Project Amp because it will be the largest rooftop project in U.S. history," powering 88,000 homes nationwide, he said.