Oregon energy loan program under scrutiny
By Matthew Kish
State Sen. Richard Devlin, D - Tualatin, said the popular state energy loan program has veered off course.
A powerful lawmaker wants the Legislature to investigate a popular state loan program that recently made headlines for a series of bad loans, including a loan to ReVolt Technology, a battery technology company that filed bankruptcy after receiving millions of dollars in state and federal incentives.
A report issued by the State Debt Policy Advisory Commission last week said losses in the Small Scale Energy Loan Program could force the state to infuse it with as much as $25 million in taxpayer money to buffer it against future losses on bad loans.
The program is administered by the Oregon Department of Energy.
Sen. Richard Devlin, D-Tualatin, who co-chairs the powerful Ways and Means Committee, said the program veered off course when it strayed from its focus on low-risk energy efficiency loans to cities and counties and started loaning money to high-risk startups like ReVolt.
He plans to ask a subcommittee to investigate the program’s missteps.
“The Department of Energy should have never engaged in speculation,” Devlin said. “We were putting dollars at risk, and we never thought we had dollars at risk in this program.”
Department of Energy officials said the state has added safeguards in the past two-and-a-half years to prevent additional losses. Officials also said the program has a historically low default rate of 0.38 percent.
"The vast majority (of loans) are paying as agreed," said Anthony Buckley, a former commercial banker brought in to oversee the program. "Looking at the default rate, we’re talking about over a 33-year history, we’re at 0.38 percent for a half a billion dollars in loans."
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