WASHINGTON
,
December 10, 2023
(press release)
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House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA), Subcommittee on Oversight and Investigations Morgan Griffith (R-VA), and Subcommittee on Energy, Climate, & Grid Security Chair Jeff Duncan (R-SC), on behalf of Oversight and Energy Subcommittee Republicans, today wrote to Department of Energy (DOE) Loan Programs Officer (LPO) Director Jigar Shah. The letter, which follows up on a previous correspondence regarding the LPO, requests information related to a $375 million conditional loan commitment to Li-Cycle, a company whose stock is reportedly tanking and is facing a class action lawsuit. DOE has failed to respond to the Committee’s October 19 letter with Senate Energy and Natural Resources Committee Ranking Member John Barrasso (R-WY) regarding ethical concerns with Mr. Shah’s association with the Cleantech Business Leaders Roundtable. KEY LETTER EXCERPTS: “While some have observed that ‘green’ energy companies have experienced difficulties this year, these developments suggest serious struggles for this company. This raises concerns about the LPO’s vetting and due diligence processes as well as potential attempts to implore companies to incur obligations they cannot meet. For example, in 2022, you reportedly met with Li-Cycle Chief Executive Officer Ajay Kochar regarding DOE’s program to encourage him to apply for an LPO loan. When he expressed uncertainty about Li-Cycle’s ability to repay the loan quickly, you urged him to attend a clean-energy conference in Pittsburgh. While news reports did not confirm it was this specific conference, you participated in an event of Cleantech Business Leaders Roundtable, a trade association you helped found, in Pittsburgh on September 22, 2022.” […] “We also seek more detail on some of your statements before the Senate Committee on Energy and Natural Resources at an October 19, 2023, hearing. In response to questions from Chairman Joe Manchin, you stated that you ‘don’t make any decisions on which loans we actually underwrite or approve.’ You also stated that ‘[t]hese loans are being overseen by, you know, career federal staff.’ As part of our oversight responsibilities, it is critical that we understand who the decision-makers are in the LPO.” BACKGROUND: On February 27, 2023, the LPO announced a conditional commitment to Li-Cycle for a $375 million direct loan to help finance a lithium-ion battery resource recovery facility in Rochester, New York. However, since that date, disturbing updates about Li-Cycle and the proposed facility have emerged. On October 23, 2023, Li-Cycle announced it was “pausing construction work” on the Rochester facility, known as the “Rochester Hub,” pending a comprehensive review of the strategy of the project and citing “escalating construction costs.” Additionally, Li-Cycle stock prices recently plunged following a recent disappointing quarterly earnings report and the pause on construction of the Rochester Hub. Reportedly, Li-Cycle stock recently lost half of its value following this quarterly report, and, as of November 15, its stock prices had fallen 88 percent year-to-date. Finally, two law firms recently announced they filed class action suits against Li-Cycle for making false and/or misleading statements and failing to disclose rising construction costs for the Rochester Hub, as well as the severity and impact of those costs. The Committee has also learned of potential challenges with the DOE loan itself. Reportedly, Li-Cycle stated the DOE loan was to close in June of this year, but that target has been pushed back twice. Li-Cycle also stated it will need to secure additional financing to meet DOE’s loan terms. The Chairs requested the following information by December 18, 2023: All documents and information sufficient to show the entire LPO process for reviewing and deciding whether to approve applications for LPO loans and loan guarantees, at both the conditional and final stages, including: Each step or stage of the review and approval process. The names and titles of each individual federal government official, employee, consultant, or contractor who participates in each step of the process. The names and titles of each individual federal official, employee, consultant, or contractor who must grant approval at each stage for an application to progress to the next stage. The role of any review panels or advisory boards that participate in this process. Any and all minutes, transcripts, or memoranda from any review panels or advisory boards that participate in this process. All internal guidance, memos, criteria, or policies governing each stage of the loan and loan guarantee application review process, including both the conditional and final stages. CLICK HERE to read the full letter.
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