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A conversation with the most interesting man on the Federal Energy Regulatory Commission.
It’s not every day that a top regulator calls into question the last few decades of policy in the area they help oversee. But that’s exactly what Mark Christie, a commissioner on the Federal Energy Regulatory Commission, the interstate power regulator, did earlier this year.
In a paper enticingly titled “It’s Time To Reconsider Single-Clearing Price Mechanisms in U.S. Energy Markets,” Christie gave a history of deregulation in the electricity markets and suggested it may have been a mistake.
While criticisms of deregulation are by no means new, that they were coming from a FERC commissioner was noteworthy — a Republican no less. While there is not yet a full-scale effort to reverse deregulation in the electricity markets, which has been going on since the 1990s, there is a rising tide of skepticism of how electricity markets do — and don’t — reward reliability, let alone the effect they have on consumer prices.
Christie’s criticisms have a conservative bent, as you’d expect from someone who was nominated by former President Donald Trump to the bipartisan commission. He is very concerned about existing generation going offline and has called activist drives against natural gas pipelines and other transportation infrastructure for the fossil-fuel-emitting power sources a “national campaign of legal warfare…[that] has prevented the construction of vitally needed natural gas transportation infrastructure.”
Since renewables have become, at times, among the world’s cheapest sources of energy and thus quite competitive in deregulated markets with fossil fuels (especially when subsidized), this kind of skepticism is a growing issue in the Republican Party, which has deep ties to oil and gas companies. The Texas state legislature, for instance, responded to Winter Storm Uri, which almost destroyed Texas’ electricity grid in 2021, with its own version of central planning: billions in low cost loans for the construction of new gas-fired power plants. Former Texas Governor Rick Perry, as secretary of energy in the Trump administration, even proposed to FERC a plan to explicitly subsidize coal and nuclear plants, citing reliability concerns. (FERC rejected it.) Some regions that didn’t embrace deregulation, like the Southeast and Southwest, also have some of the most carbon-intensive grids.
But Christie is not so much a critic of renewable resources like wind and solar, per se, as he is very focused on the benefits to the grid of ample “dispatchable” resources, i.e. power sources that can power up and down on demand.
This doesn’t have to mean uncritical acceptance of existing fossil fuel infrastructure. The idea that markets don’t reward reliability enough can help explain the poor winterization for fossil fuel generation that was so disastrous during Winter Storm Uri. And in California, the recognition that renewables alone can’t power the grid 24 hours a day has led to a massive investment in energy storage, which can help approximate the on-demand nature of natural gas or coal without the carbon pollution.
But Christie is primarily interested in the question of just how the planning is done for a system that links together electric generation and consumers. He criticized the deregulated system in much of the country where power is generated by companies separate from the utilities that ultimately sell and distribute that power to customers and where states have less of a role in overall planning, despite ultimately approving electricity rates.
Instead, these markets for power are mediated through a system where utilities pay independent generators a single price for their power at a given time that is arrived at through bidding, often in the context of sprawling multi-state regional transmission organizations like PJM Interconnection, which covers a large swath of the Midwest and Mid-Atlantic region, or the New England Independent System Operator. He says this set-up doesn’t do enough to incentivize dispatchable power, which only comes online when demand spikes, thus making the system overall less reliable, while still showing little evidence that costs have gone down for consumers.
Every year, grid operators and their regulators — including Christie — warn of reliability issues. What Christie argues is that these reliability issues may be endemic to the deregulated system.
Here is where there could be common ground between advocates for an energy transition and conservative deregulation skeptics like Christie. While the combination of deregulation and subsidies has been great for getting solar and wind from zero to around 13 percent of the nation’s utility-scale electricity generation, any truly decarbonized grid will likely require intensive government supervision and planning. Ultimately, political authorities who are guiding the grid to be less carbon-intensive will be responsible for keeping the lights on no matter how cold, warm, sunny, or windy it happens to be. And that may not be something today’s electricity “markets” are up for.
I spoke with Christie in late June about how FERC gave us the electricity market we have today, why states might be better managers than markets, and what he’s worried about this summer. Our conversation has been edited for length and clarity.
What happened to our energy markets in the 1990s and 2000s where you think things started to go wrong?
In the late ‘90s, we had this big push called deregulation. And as I pointed out in the article, it really wasn’t “deregulation” in the sense that in the ‘70s, you know, the trucking and airlines and railroads were deregulated where you remove government price regulation and you let the market set the prices. That’s not what happened. It really was just a change of the price-setting construct and the regulatory construct.
It took what had been the most common form of regulation of utilities, where utilities are considered to be natural monopolies, and said we’re going to restructure these utilities and we’re going to let the generation part compete in these regional markets.
And, you know, from an economic standpoint, okay, so far so good. But there’s been a lot of questioning as to whether there’s really true competition. Many parts of the country also just didn’t do it.
I think there’s a serious question whether that’s benefiting consumers more than the cost of service model where state regulators set the prices.
So if I’m an electricity consumer in one of the markets that’s more or less deregulated, how might reliability become an issue in my own home?
First of all, when you’re in one of these areas that are deregulated, essentially you’re paying the gas price. If it goes up, that’s what you’re going to pay. If it goes down, it looks really good.
But from the reliability standpoint, the question is whether these markets are procuring enough resources to make sure you have the power to keep your lights on 24/7. That is the big question to a consumer in a so-called deregulated state: Are these markets, which are now the main vehicle for buying generation resources, are they getting enough generation resources to make sure that your lights stay on, your heat stays on, and your air conditioning stays on?
Do you think there’s evidence that these deregulated markets are doing a worse job at that kind of procurement?
Well, let’s take, for example, PJM, which came out with an announcement in February that said they were going to lose in the next five years over 40 gigawatts. A gig is 1,000 megawatts, so that’s a lot of power, that’s a lot of generating resources. And the independent market monitor actually has told me it is closer to 50 gigawatts. So all these units are going to retire and they’re going to retire largely for economic reasons. They’re not getting sufficient compensation to stay open.
The essence of restructuring was that generating units are going to have to make their money in the market. They’re not going to get funding through what's called the “rate base,” which is the regulated, traditional cost-of-service model. They have to get it in the markets and theoretically, that sounds good.
But in reality, if they can’t get enough money to pay their cost, they’re going to retire and then you don’t have those resources. Particularly in the RTOs [regional transmission organizations, i.e. the multi-state electricity markets], you’re seeing these markets result in premature retirements of generating resources. And so, now, why is that? It’s more of a problem in the RTOS than non-RTOS because in the non-RTOS, they procure resources under the supervision of a state regulator through what’s called an integrated resource plan or IRP.
The reason I think the advantage and reliability is with the non-RTOS is that those utilities have to prove to a state regulator that their resource plan makes sense, that they’re planning to buy generating resources. Whether they’re buying wind or solar or gas, whatever, they have to go to a state regulator and say, “Here’s our plan” and then seek approval from that regulator. And if they’re shutting down units, the state regulator can say, “Wait a minute, you’re shutting down units that a few years ago you told us were needed for reliability, and now you’re telling us you want to shut them down.” So the state regulator can actually say , “No, you’re not going to shut that unit down. You’re going to keep running it.”
That’s why I think you have more accountability in the non-RTOS because the state regulators can tell the utility, “you need more resources, go build it or buy it,” or “you already have resources, you’re not going to shut them down, we’re not going to let you.”
You don’t have that in an RTO. In an RTO, it’s all done through the market. The market decides, to the extent it has a mind. You know, it’s all the result of market operations. It’s not anybody saying whether it’s a good idea or not for a certain unit to shut down.
I find it interesting that a lot of the criticism of the deregulated system — and a lot of places that are not deregulated — come from more conservative states that would generally not think of themselves as having this kind of strong state role in economic policy. What’s different about electricity? Why do you think the politics of this line up differently than it would on other issues?
I don’t know. That’s an interesting question. I haven’t even thought about it in those terms.
I think it goes back to when deregulation took place in the mid-to-late ‘90s. Other than Texas, which went all the way, the states that probably went farthest on it were in the Northeast. Part of the reason why is because they already had very high consumer prices. I think deregulation was definitely sold as a way to reduce prices to consumers. It hasn’t worked out that way.
Whereas you look at the Southeast, which never went in for deregulation. The Southeastern states, which are still non-RTO states, had relatively very low rates, so they didn’t see a problem to be fixed.
The other big trend since the 1990s and 2000s is the explosive growth of renewables, especially wind and solar. Is there something about deregulated electricity markets, the RTO system, that makes those types of resources economically more favorable than they would be under a different system?
Well, if you’re getting a very high subsidy, like wind and solar are getting, it means you can bid into the energy markets effectively at zero. So if you can bid in at zero offering, you’re virtually guaranteed to be a winner. In a non-RTO state, a state that's doing it through an integrated resource plan, the state regulator reviews the plan. That's why I think an IRP approach is better actually for implementing wind and solar because you can implement and deploy wind and solar as part of an integrated plan that includes enough balancing resources to make sure you keep the lights on.
To me an Integrated Resource Plan is a holistic process, where you can look at all the resources at your disposal: wind, solar, gas, as well as the demand side. And you can balance them all in a way that you think, “Okay, this balance is appropriate for us for the next three years, or four years, or five years.” Because you’re typically doing an IRP every three to five years anyway. And so I think it’s a good way to make sure you balance these resources.
In a market there’s no balancing. In a market it’s just winners and losers. And so wind and solar are almost always going to win because they have such massive subsidies that they’re going to get to offer in at a bid price of zero. The problem with that is they’re not going to get paid zero. They’re going to get paid the highest price [that all electricity suppliers get]. So they offer in at zero, but they get paid the highest price, which is going to be a gas price. It’s probably going to be the last gas unit to clear, that’s usually the one that’s the highest price unit. And yet because of the single clearing price mechanism, everybody gets that price. So you can offer it at zero to guarantee you clear, but then you’re going to get the highest price, usually a gas combustion turbine peaker.
Do you think we would see as much wind and solar on the grid if it weren’t for the fact that a lot of the resources are benefiting from the pricing mechanism you describe?
I don’t think you can draw that conclusion because there are non-RTO states that have what’s called a mandatory RPS, mandatory renewable portfolio standard. And so you can get there through a mandatory RPS and a cost to service model just as you can end up in a market. And actually, again, I think you can get there in a more balanced way to make sure that the reliability is not being threatened in the meantime.
To get back to what we’re talking about in the beginning, my understanding is that FERC, where you are now, played a large role in encouraging deregulation in the formation of RTOs. Is this something that your staff or other commissioners disagree with you about? How do you see the role you’re playing, where you’re doing public advocacy and reshaping this conversation around deregulation?
First of all, we always have to give the standard disclaimer, you never talk about a pending case. But FERC was really the driving force behind a lot of this deregulation. So obviously, they decided that that’s what they wanted to push, and they did. And so I think it’s appropriate as a FERC regulator to raise questions. I think raising questions about the status quo is an important thing that we do and should do. Ultimately, you advocate for what you think it ought to be and if the votes come eventually, it might take several years, but it’s important.
One of the things I try to do is, I put the consumer at the center of everything I do. It is absolutely my priority. And I think that it should be every regulator’s priority, particularly in the electric area because most consumers in America — in fact, almost all consumers in America — are captive customers. By captive. I mean, they don’t get to choose their electric supplier.
Like, where do you live, Matthew?
I live in New York City.
You don’t get to choose, right? You’re getting electricity from ConEd. And you don’t have any choice. So you’re a captive customer. And most consumers in America are captive customers. We tried this retail choice in a few states that didn’t work. You know, they’re still doing it. I’m not going to say whether it’s working or not, but I know we tried it in Virginia, and it didn’t work at all because of a lot of reasons.
I always put customers first and say, “Look, these customers are captive. We have to protect them. We have to protect the captive customers by making sure they’re not getting overcharged.” So that’s why I care about these issues. And that’s why I wrote this article. I think that customers in a lot of ways in America are not getting treated fairly. They’re getting overcharged and I think they’re not getting what they should be getting. And so I think a big part of it is some of this stuff that FERC's been pushing for the last 25 years.
Our time is running out. So I will leave with a question that is topical: It’s already been quite hot in Texas, but outside of Texas and in FERC-land, where are you concerned about reliability issues this summer?
Well, I’m concerned about everywhere. It’s not a flippant remark. I read very closely the reliability reports that we get from NERC and we have reliability challenges in many, many places. It’s not just in the RTOs. I think we have reliability challenges in the South. Fortunately, the West this year, which has been a problem the last couple of years, is actually looking pretty good because all the rain last winter — even flooding — really was great for hydropower.
I’m from California, and I think it’s the first time in my adult life that I remember stories about dams being 100 percent, if not more than 100 percent, full.
The rains and snowfall were so needed. It’s filled up reservoirs that have been really dry for years. And from an electrical standpoint, it’s been really good for hydro. So they’re looking at really good hydro availability this summer in ways they haven't been for the last several years. So the West actually, because of all the rain and the greater available of hydro, I think is in fairly good shape.
There’s a problem in California with the duck curve, the problem is still there. If you have such a high solar content, when the sun goes down, obviously the solar stops generating and so what do you do you know for the next four to five hours? Because the air conditioners are still running, it’s still hot, but that solar production has just dropped off the table. So they’ve been patching with some battery storage and some gas backup.
But I’m worried about everywhere. I watch very closely the reports that come out of the RTOs and you can’t be shutting down dispatchable resources at the rate we’re doing when you’re not replacing them one to one with wind or solar. The arithmetic doesn’t work and it’s going to catch up to us at some point.
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Current conditions: A rare wildfire alert has been issued for London this week due to strong winds and unseasonably high temperatures • Schools are closed on the Greek islands of Mykonos and Paros after a storm caused intense flooding • Nearly 50 million people in the central U.S. are at risk of tornadoes, hail, and historic levels of rain today as a severe weather system barrels across the country.
President Trump today will outline sweeping new tariffs on foreign imports during a “Liberation Day” speech in the White House Rose Garden scheduled for 4 p.m. EST. Details on the levies remain scarce. Trump has floated the idea that they will be “reciprocal” against countries that impose fees on U.S. goods, though the predominant rumor is that he could impose an across-the-board 20% tariff. The tariffs will be in addition to those already announced on Chinese goods, steel and aluminum, energy imports from Canada, and a 25% fee on imported vehicles, the latter of which comes into effect Thursday. “The tariffs are expected to disrupt the global trade in clean technologies, from electric cars to the materials used to build wind turbines,” explained Josh Gabbatiss at Carbon Brief. “And as clean technology becomes more expensive to manufacture in the U.S., other nations – particularly China – are likely to step up to fill in any gaps.” The trade turbulence will also disrupt the U.S. natural gas market, with domestic supply expected to tighten, and utility prices to rise. This could “accelerate the uptake of coal instead of gas, and result in a swell in U.S. power emissions that could accelerate climate change,” Reutersreported.
Republican candidates won in two House races in Florida on Tuesday, one of which was looking surprisingly tight going into the special elections. The victories by Jimmy Patronis in Florida’s First District and Randy Fine in the Sixth District bolster the party’s slim House majority and could spell trouble for the Inflation Reduction Act as the House Ways and Means Committee mulls which programs to cut to pay for tax cuts. But the result in Wisconsin’s Supreme Court election was less rosy for Republicans. Liberal Judge Susan Crawford defeated conservative Brad Schimel despite Schimel’s huge financial backing from Tesla CEO and Trump adviser Elon Musk, who poured some $15 million into the competition. The outcome “could tarnish the billionaire’s political clout and trigger worry for some Republicans about how voters are processing the opening months of Trump’s new administration,” as The Wall Street Journalexplained.
The Trump administration announced mass layoffs across the Department of Health and Human Services on Wednesday, part of a larger effort to reduce the agency’s workforce by 25%. The cuts included key staffers with the Low Income Home Energy Assistance Program, which has existed since 1981 and helps some 6.7 million low-income households pay their energy bills. A 2022 white paper calls LIHEAP “one of the most critical components of the social safety net.” The move comes at a time when many U.S. utilities are preparing to raise their energy prices to account for higher costs for materials, labor, and grid upgrades. In a scathing letter to HHS Secretary Robert F. Kennedy. Jr., Senate Energy and Commerce Democrats call the workforce cuts “reckless” and demand detailed explanations for why roles have been eliminated.
Energy storage startup Energy Vault on Wednesday announced it had closed $28 million in project financing for a hybrid green hydrogen microgrid energy storage facility in California. The firm says its Calistoga Resiliency Center, deployed in partnership with utility company Pacific Gas & Electric, is “specifically designed to address power resiliency given the growing challenges of wildfire risk in California.” The zero-emission system will feature advanced hydrogen fuel cells that are integrated with lithium-ion batteries, which can provide about 48 hours of back-up power via a microgrid to the city of Calistoga during wildfire-related power shutoffs. The site is expected to be commercially operational in the second quarter of 2025.
“The CRC serves as a model for Energy Vault’s future utility-scale hybrid microgrid storage system deployments as the only existing zero-emission solution to address [power shutoff] events that is scalable and ready to be deployed across California and other regions prone to wildfires,” the company said in a press release. As Heatmap’s Katie Brigham wrote last fall, PG&E has become an important partner for climate and energy tech companies with the potential to reduce risk and improve service on the grid.
China will finalize its first-ever sale of a green sovereign bond Wednesday. The country is expected to issue the bond on the London Stock Exchange and has reportedly received more than $5 billion in bids. “It’s no coincidence that China has chosen to list its debut green bond in London, given European investors’ continued strong demand for environmental products,” Bloombergnoted. Green bonds are investment vehicles that raise money exclusively for projects that benefit the climate or environment. China’s finance ministry wants the bond to “attract international funds to support domestic green and low-carbon development,” and specifically climate change mitigation and adaptation, nature conservation and biodiversity, and pollution prevention and control. Some of the money raised might also go toward China’s EV charging infrastructure, according toReuters.
GE Vernova has now produced more than half of the turbines needed for the SunZia Wind project in New Mexico. When completed in 2026, the 2.4 gigawatt project will be the largest onshore wind farm in the Western Hemisphere.
Rob and Jesse catch up on the Greenhouse Gas Reduction Fund with former White House official Kristina Costa.
The Inflation Reduction Act dedicated $27 billion to build a new kind of climate institution in America — a network of national green banks that could lend money to companies, states, schools, churches, and housing developers to build more clean energy and deploy more next-generation energy technology around the country.
It was an innovative and untested program. And the Trump administration is desperately trying to block it. Since February, Trump’s criminal justice appointees — led by Ed Martin, the interim U.S. attorney for the District of Columbia — have tried to use criminal law to undo the program. After failing to get the FBI and Justice Department to block the flow of funds, Trump officials have successfully gotten the program’s bank partner to freeze relevant money. The new green banks have sued to gain access to the money.
On this week’s episode of Shift Key, Rob and Jesse talk with Kristina Costa, who has been tracking the effort to bankrupt the green banks. Costa helped lead the Inflation Reduction Act’s implementation in the White House from 2022 to 2025 — and is a previous Shift Key guest. She joins us to discuss how Trump is weaponing criminal law to block a climate program, whether there’s any precedent for his actions, and what could come next in the legal battle. Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap, and Jesse Jenkins, a professor of energy systems engineering at Princeton University.
Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, or wherever you get your podcasts.
You can also add the show’s RSS feed to your podcast app to follow us directly.
Here is an excerpt from our conversation:
Robinson Meyer: There's kind of two lines you hear from the Trump administration about this, two claims made by the Trump administration about the reason for these seizures, and I just wanna talk about them briefly because this is an unprecedented action. We should look at why the government has claimed that it needs to take this unprecedented action.
The first has to do with this video made by Project Veritas, a kind of conservative media organization …
Kristina Costa: A hit squad.
Meyer: A hit squad that recorded, unwittingly, an EPA official who described the EPA’s actions during December 2024, between the loss of the election and the inauguration, as “throwing gold bars off the Titanic.” That the agency was so eager and desperate to spend as much of the IRA down as it could before the Trump administration took office that it was like they were throwing gold bars off the Titanic — you know, a sinking ship.
The EPA administrator has fixated on this line and described it as waste and self-dealing, suggesting reckless financial mismanagement, blatant conflicts of interest, astonishing sums of tax dollars awarded to unqualified recipients and severe deficiencies of regulatory oversight.
You were involved in setting up the IRA. I wonder, first of all, just how do you reflect on this episode? And second of all, was the Biden administration doing the proverbial version of throwing gold bars off the Titanic during the post-election period?
Costa: Yeah, so I mean, it falls apart as any sort of quote-unquote evidence in what's happening with the Greenhouse Gas Reduction Fund if you just believe in the linear nature of time. So, as I said, we announced EPA made the selections in April of 2024. The funds were fully obligated in August of 2024. Grantees were starting to make announcements about investments in October of 2024 — all dates which precede election day by weeks to months. And so it is just a complete fabrication on the part of Lee Zeldin that there was any sort of inappropriate action on the part of the Biden EPA or any of the other agencies in doing what Congress directed us to do, which was to award and obligate funds to recipients consistent with the provisions of the Inflation Reduction Act that authorized and appropriated funds for the programs.
We had also — and I think I might have said this when I was with you guys in December — one of the first things that we did, from the White House implementation team, was to meet with all of our grant agencies and, in September and October of 2022, set targets for them for how much funding we wanted them to try to award and obligate by the end of the administration. And we set a goal, basically, that we would be aiming to have at least 80% of the available funds obligated by the end of 2024. And we hit that. And so the idea that there was some massive acceleration post-election — like, were there some contracts that the agencies obligated in December and January that, in the event of a Kamala Harris administration, they would've maybe obligated in February and March instead? Sure. I'm not going to say otherwise, but those grants had been made already. There wasn't this rush of actual decision-making.
Music for Shift Key is by Adam Kromelow.
That trust was hard won — and it won’t be easily regained.
Spring — as even children know — is the season for planting. But across the country, tens of thousands of farmers who bought seeds with the help of Department of Agriculture grants are hesitating over whether or not to put them in the ground. Their contractually owed payments, processed through programs created under the Biden administration, have been put on pause by the Trump administration, leaving the farmers anxious about how to proceed.
Also anxious are staff at the sustainability and conservation-focused nonprofits that provided technical support and enrollment assistance for these grants, many of whom worry that the USDA grant pause could undermine the trust they’ve carefully built with farmers over years of outreach. Though enrollment in the programs was voluntary, the grants were formulated to serve the Biden administration’s Justice40 priority of investing in underserved and minority communities. Those same communities tend to be wary of collaborating with the USDA due to its history of overlooking small and family farms, which make up 90% of the farms in the U.S. and are more likely to be women- or minority-owned, in favor of large operations, as well as its pattern of disproportionately denying loans to Black farmers. The Biden administration had counted on nonprofits to leverage their relationships with farmers in order to bring them onto the projects.
“This was an opportunity to repair some of that trust, through this project,” Emily Moose, the executive director of the sustainable agriculture organization A Greener World, told me in an email. Moore and her teammates spent years recruiting farmers from the group’s Oregon community, and eventually got 77 of them to sign up to create certified regenerative farm management plans. A Greener World was notified in January that its reimbursements were being suspended, and now risks losing $10,000 in incentive payments, meaning the farmers in the program “are now having to weigh paying for certification out of pocket or dropping the certification process entirely and losing market opportunities.”
Nicole Delcogliano, director of programs at the Organic Growers School, a farmer training organization in North Carolina, and a small farmer herself had similar hopes for a grant the group received to help mentor and educate early-stage farmers. The department had “finally started to build back a little bit of trust,” she told me. With the funding pause, she said, “I think that is going to be lost.”
Affected grants include billions set aside for the USDA through the Inflation Reduction Act for soil and water conservation projects, as well as more than $820 million earmarked for the Rural Energy for America Program, or REAP, which incentivized agricultural producers to make energy-efficiency improvements on their land. Grants issued through the Partnerships for Climate-Smart Commodities program for farm innovations that have greenhouse gas and carbon sequestration benefits — funded through the USDA’s Commodity Credit Corporation, a Dust Bowl-era entity more typically leveraged to protect farm income and prices during disasters — are also on pause. Original plans for the program under Biden would have seen it eventually scaled to 60,000 farms, reducing an estimated 50,000 million metric tons of CO2 equivalent.
Though the Trump administration eventually released about 1% of the IRA-related USDA grant money in late February, much remains out of reach, with no timeline for payout. The National Sustainable Agriculture Coalition assumes that the “majority” of the $2.3 billion allocated to farmers on IRA-funded contracts is “likely still in USDA’s coffers.” Additionally, more than half of the $3.1 billion allocated to the Partnerships for Climate-Smart Commodities program had not yet been paid out by the end of February, according to The Hagstrom Report, an agricultural news service. (The Trump administration has said it would reconsider REAP grants if applicants rewrite them to “remove harmful [diversity, equity, inclusion, and accessibility] and far-left climate features.”)
All of the affected grant programs work on a reimbursement basis, with the farmers incurring costs upfront protected, in theory, by a contractual guarantee that the government will pay them back. Individual farmers aren’t usually the direct beneficiaries of USDA grants, however. The USDA more commonly awards a grant to nonprofit organizations that, in turn, provide financial and technical support to farmers making sustainable transitions. Many of the nonprofits are now having to furlough or lay off staff. Meanwhile, farmers are still seeking their reimbursements, but there’s no funding there to pay them.
Hannah Smith-Brubaker, the executive director of Pasa Sustainable Agriculture, a Pennsylvania-based nonprofit that was awarded a Climate Smart Commodities grant and a Farm and Food Workers Relief from the USDA, is planning to furlough 60 people — most of her team — due to the pause. Another project director at a Mid-Atlantic sustainability nonprofit told me his organization has “been lending cash” from their own books since January 27, when the pause was announced, and that he anticipated being laid off shortly after our call.
But while the nonprofits are certainly hurting, the farmers are the ones stuck with the final bill. In addition to the USDA’s history of discriminating against Black farmers, many who manage smaller acreages report feeling overlooked by the federal government in favor of powerful agro-business conglomerates. More than 70% of farmers under age 40 reported being unfamiliar with USDA programs that could help them, and nearly half said they’d never received support from the agency, according to polling by the National Young Farmers Coalition published in 2022.
“In the last administration, there was recognition that they didn’t have the trust of a lot of farmers who historically haven't been served, or been underserved, by USDA,” Smith-Brubaker said. With programs like the Climate-Smart Commodities grant, the Biden administration “asked us to leverage the trust that we already have with farmers — to ask them to trust us to enter into this program.”
It worked: Many of the more than 30,000 contracted farms are already a year or two into multi-year projects with nonprofits designed to improve soil health, plant cover crops, or improve farm efficiency. That means they’ve already hired the extra staff for the projects, placed orders for new equipment, and set aside precious land for soil-enrichment projects.
But with no word on the future of their funding, some are now hesitating over whether to spend more money out of pocket on those projects if the government might not uphold its end of the deal. The pause has led many of the farmers I spoke with to reevaluate their trust in future USDA funding. “It’s unsettling because you’re like, ‘Well, if I implement the practices I’m supposed to, but then I don’t get that reimbursement sometime in 2025, what does that look like?’” said Delcogliano, who received one Conservation Stewardship Plan payment in October for her farm, Green Toe Ground, but hasn’t yet heard yet whether future payments will be affected.
Delcogliano also emphasized that despite the commodities grant containing the “buzz word” of “climate,” what it actually encourages are long-established practices that help conserve water and soil. “It’s just smart farming,” she told me. Ed Winebarger, a chef and farmer in North Carolina, told me he participated in the Climate-Smart Commodities program for a year and saw an immediate 20% increase in production. “My crops did better, the system works — period,” he said.
Small farmers who pursued the government grants likely would have been interested in the practices regardless of the financial incentives in many cases; Erin Foster West, the Policy Campaigns Director for the National Young Farmers Coalition, told me the group’s research found nearly 85% of its membership was “motivated by environmental stewardship to farm.” Caroline Anderson Novak, the head of the Professional Dairy Managers of Pennsylvania — which is collaborating with Penn State on its greenhouse-gas-reducing Climate-Smart Commodities program, and which hasn’t received a notification of a pause from the USDA as other organizations have — told me that things like experimental feeds and sharper data assessments represent “operational improvements” that just happen to have attractive climate upsides. “They are things that the farm already wants to do,” she said.
What the grants do is provide the capital necessary for farmers to put these efficiency upgrades into practice. Margins, particularly at small farms, can be razor thin, and the risks of operational experiments can be steep. “A lot of the time, you would need to pursue a loan just to get started with the project,” Emma Jagoz, the owner of Moon Valley Farm in Maryland, who has hundreds of thousands in USDA grants tied up by the pause, told me.
As a result, farmers waiting for clarity on their grants generally have clear eyes about the root of the problem. “The organization that we work with, they can’t help the cuts. It’s not their fault,” Patrick Brown, who enrolled 90% of his North Carolina farm’s acreage in a climate-smart project, told me. “This administration has blatantly stated their approach.”
Kristin Reilly, the executive director of the Choose Clean Water Coalition, a collective of small nonprofits in the Chesapeake Bay watershed that is helping its farming partners navigate the funding freeze, agreed that “the practitioners on the ground are definitely seeing that it’s not the nonprofits who are not paying them; they’re struggling along with them.”
Almost everyone I spoke with was pessimistic that the USDA would honor the grants, even as Earthjustice and other groups have launched lawsuits against the federal government over the freeze. (Pasa has joined a lawsuit with the Southern Environmental Law Center.) “I don’t think [the pause is] going to lift as long as this guy is in power because he’s so disconnected from reality,” Winebarger, the North Carolina chef and farmer, said of President Trump. “He’s never put his hands in dirt in his entire life. He doesn’t understand me. He doesn’t understand my farming neighbors.”
Delcogliano shared a similar sentiment: “The government is incompetent,” she told me. “They’re not in touch with the people that are actually doing the work.”
Perhaps most crucially, while the federal money is paused, the climate continues changing. Any given season could bring a new drought or deluge that wipes out a farm entirely. Though separate from the troubles with the grant pauses, both Delcogliano and Winebarger are also recovering from extensive damage to their farms from Hurricane Helene, a process they told me has been made even more painful due to the lack of emergency funding available from the Federal Emergency Management Agency. Farmers will also be particularly vulnerable to the impacts of some of the tariffs the Trump administration plans to enact this week.
“It just feels like I’m driving behind a truck full of hammers that are dumping on me,” Winebarger said of the compounding problems. “And I can’t dodge them — they’re going to hit me. I don’t know how we’re going to get out from underneath this.”
Wolfe’s Neck Center for Agriculture & the Environment, a Maine-based nonprofit that stands to lose a $35 million Climate-Smart Commodities grant, has begun to reformulate how its programs could continue with the support of buyer funds, state funding sources, or philanthropic dollars instead. It had once envisioned working with more than 400 partners over the grant’s lifespan, but that idea has given way to smaller-scale projects it can still afford.
“This is about so much more than climate change,” Ellen Griswold, the director of Wolfe’s Neck, stressed to me about the importance of finding a way forward with or without the government. “It’s about making farmers as resilient and profitable as possible. Without this assistance, there will be impacts to the farming community” — including farmers themselves and their suppliers. That could include a fencing company, nursery, or refrigerated truck dealer farmers can no longer afford to pay, or regional schools or food banks that are now forced to pay more for local, organic produce.
The reverberations of the grant pause will be felt far into the future, too. Even if the contracts are ultimately honored by the Trump administration, some farmers will undoubtedly feel justified in their suspicions of partnering with the federal government. Nonprofits will have more difficulty convincing community partners to take on voluntary climate projects down the line, and common-sense efficiency projects with climate co-benefits will stay dormant.
“If another opportunity comes along like this, I completely understand if farmers say, ‘No, I’m not doing that,’” Smith-Brubaker of Pasa said.