Enron Accounting by DOE

Reader comment on: The Government's $3.2 Trillion Loan Portfolio

Submitted by Cliff Claven (United States), Jan 6, 2015 18:20

DOE's claim that its loan portfolio is turning a profit is worthy of Arthur Anderson and Enron -- it is a ridiculous misrepresentation by Moniz that violates basic accounting principles by counting loan interest as pure profit "without respect to Treasury's borrowing cost," as reads a tiny note on its worthless recent disclosure. When these costs are properly included, the result continues to be a large net loss that the Administration projects to continue (http://blog.metrotrends.org/2014/11/spin-alert-doe-loans-losing-money-making-profits/ ). Furthermore, each of these projects that are still alive, including Tesla, continue to feed at the public trough of subsidies that, on a per-kWh basis, dwarf any benefits available to their competition. Most were established with installation/investment tax credits (ITC) and bonus tax depreciations (MACRS) that together covered 60% of their project costs out of the US Treasury. Some also got state grants and/or loan guarantees. All are also getting one or more of the following: US Treasury production tax credits (PTC), EPA renewable identification numbers (RIN), USDA crop program subsidies, state renewable energy credits (REC), zero emissions credits (ZEC) appropriated from their competitors, artificially inflated power purchase agreement (PPA) and feed-in tariffs (FIT) rates, etc. In addition, they are benefiting from market-distorting government mandates such as dispatch priority and curtailment prohibitions, fuel blending quotas, must-take obligations, guaranteed retail prices for wholesale product, etc. The money is going from taxpayer wallets and electricity rate payer wallets and motorist wallets into the pockets of these corporate welfare clients of the current Administration. Pull the plug on subsidies and these parasites all dry up in an instant along with their loan payments.

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