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House GOP Vetoes CFA Energy Project Grants Over Process

House Majority Leader Mike Turzai this week said there should be in-depth discussions with the Corbett administration about the decision making process at the Commonwealth Financing Authority (CFA) over grant and loan programs.   The seven-member authority oversees many state economic development, water and  grant and loan programs, including the state’s solar, geothermal and wind, and alternative and clean energy programs.

Michael Karp, the House Republican appointee to the seven member authority has been vetoing grants and pushing decisions back for several months, while demanding the CFA change its guidelines and operating procedures.  Karp has consistently argued that to improve the Commonwealth’s return on funding, interest rates for loans established in the Rendell Administration or unreasonable in today’s market, and that conversion of grant programs to low-interest loans would save taxpayers money in the long run by effectively making the programs more like a revolving fund.

The CFA must have approval of all four legislative caucus members and the Administration to approve loans or grants, effectively giving each legislative caucus representative veto power over decisions. 

This year, most of the alternative energy projects approved were for manufacturing or building retrofits.  In January, Karp voted down 20 solar energy production project grants totaling about $13 million, according to the meeting minutes, pending a review of the financial assessments and possible negotiations with the applicants over loan rates, guarantees and payback periods.

As a result of the impasse, the CFA is currently not accepting applications for energy project grants or loans, until the new guidelines are completed and approved.  Karp has announced his willingness to veto any other energy projects until that time, and as a result, votes on pending energy projects have been taken off the voting agenda of the CFA until new guidelines are in place.