Energy Dept.'s loan program could need bailout
PORTLAND — State Treasurer Ted Wheeler has asked for a suspension of lending through the Oregon Energy Department's Small Scale Energy Loan Program.
The fund faces a $20 million deficit after making bad loans on energy projects. In a letter sent Thursday to Gov. Kate Brown, Wheeler said the program is supposed to be self-sustaining. Instead, it's "in trouble."
The program began in 1981 and is designed to promote conservation by providing low-interest loans for renewable-energy projects.
Wheeler, a Democrat who's running for mayor of Portland, said a bailout might be necessary, and that would take money from schools, police and other programs. He wants the lending suspension to last until the program is vetted and its long-term viability assured.
"Public debt is a powerful took to benefit our state, but it must be utilized wisely and with restraint," he wrote.
Wheeler's letter referenced one of the more notorious failures, an $18 million loan to a Clatskanie ethanol plant that went bankrupt in 2009. Wheeler said that failure and several delinquent loans led him in 2012 to recommend augmenting the program's depleted loan-loss reserve. His request went unheeded.
"Since that time, other large loans have also gone into default and have been written off as non-collectible, which has further deteriorated SELP's balance sheet and reserve balances," he wrote.
Wheeler plans to formally recommend the suspension at the Jan. 19 meeting of the State Debt Policy Advisory Committee.
Wheeler's request is the latest blow for the state Energy Department, which has come under persistent scrutiny for its handling of green energy tax credits.
Gov. Kate Brown's office recently announced a comprehensive review of its management and performance. The Legislature has established a special committee to review the agency.