DOE’s green energy portfolio moves from solar disasters to a wind one.
Environment & Energy PM reports,
The Department of Energy’s Western Area Power Administration did not implement “necessary safeguards” to protect taxpayer money when it agreed to help fund a 214-mile transmission line that is now behind schedule and over budget, according to a management alert from the agency’s inspector general.
The Montana Alberta Tie Line was the first project Western authorized under the $3.25 billion in borrowing authority it received through the American Recovery and Reinvestment Act. The agency entered a $161 million financing agreement with MATL LLP in October 2009 to develop a transmission line that would support proposed wind power generation farms in Montana.
Since then, the project has hit snag after snag, including legal difficulties in securing the necessary land and cost overruns now estimated at $70 million. As of July 2011, Western had permitted MATL to expend $152 million of the $161 million committed.
The project is now at a standstill. But IG Gregory Friedman found that Western did not ensure its investment was protected; specifically, the agency did not initially require the company to establish an “earned value management system” that integrates cost and schedule information to allow Western to keep track of progress. MATL LLP also did not create a reserve for cost overruns until a year after the start of the project.