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Politics

EPA Claims Congress Killed the Green Bank

The saga of the Greenhouse Gas Reduction Fund takes another turn.

Throwing away a green bank.
Heatmap Illustration/Getty Images

On July 3, just after the House voted to send the reconciliation bill to Trump’s desk, a lawyer for the Department of Justice swiftly sent a letter to the U.S. Court of Appeals for the D.C. Circuit. Once Trump signed the One Big Beautiful Bill Act into law, the letter said, the group of nonprofits suing the government for canceling the biggest clean energy program in the country’s history would no longer have a case.

It was the latest salvo in the saga of the Greenhouse Gas Reduction Fund, former President Joe Biden’s green bank program, which current Environmental Protection Agency Administrator Lee Zeldin has made the target of his “gold bar” scandal. At stake is nearly $20 billion to fight climate change.

Congress created the program as part of the Inflation Reduction Act in 2022. It authorized Biden’s EPA to award that $20 billion to a handful of nonprofits that would then offer low-cost loans to individuals and organizations for solar installations, building efficiency upgrades, and other efforts to reduce emissions. The agency announced the recipients last summer, before its September deadline to get the funds out.

Then Trump took office and ordered his agency heads to pause and review all funding for Inflation Reduction Act programs.

In early March, buoyed by a covert video of a former EPA employee making an unfortunate and widely misunderstood comparison of the effort to award the funding to “throwing gold bars off the edge” of the Titanic, Zeldin notified the recipients that he was terminating their grant agreements. He cited “substantial concerns” regarding “program integrity, the award process, programmatic fraud, waste, and abuse, and misalignment with agency’s priorities.”

In court proceedings over the decision, the government has yet to cite any specific acts of fraud, waste, or abuse that justified the termination — a fact that the initial judge overseeing the case pointed out in mid-April when she ordered a preliminary injunction blocking the EPA from canceling the grants. But the EPA quickly appealed to the D.C. Circuit Court, which stayed the lower court’s injunction. The money remains frozen at Citibank, which had been overseeing its disbursement, as the parties await the appeals court’s decision.

As all of this was playing out, Congress wrote and passed the One Big Beautiful Bill Act. The new law rescinds the “unobligated” funding — money that hasn’t yet been spent or contracted out — from nearly 50 Inflation Reduction Act programs, including the Greenhouse Gas Reduction Fund. According to an estimate from the Congressional Budget Office, the remaining balance in the fund was just $19 million.

The Trump administration, however, is arguing in court that the OBBBA doesn’t just recoup that $19 million, but also the billions in awards at issue in the lawsuit. Congress has rescinded “the appropriated funds that plaintiffs sought to reinstate through this action,” Principal Deputy Assistant Attorney General Yaakov Roth wrote in his July 3 letter, implying that the awards were no longer officially “obligated” and that all of the money would have to be returned. Therefore, “it is more clear than ever that the district court’s preliminary injunction must be reversed,” he wrote.

Roth cited a statement that Shelley Moore Capito, chair of the Senate Environment and Public Works Committee, made on the floor of the Senate in June. She said she agreed with Zeldin’s decision to cancel the Greenhouse Gas Reduction Fund grants, and that it was Congress’ intent to rescind the funds that “had been obligated but were subsequently de-obligated” — about $17 billion in total. She did not acknowledge that Zeldin’s decision was being actively litigated in court.

On Monday, attorneys for the plaintiffs fired back with a message to the court that the reconciliation bill does not, in fact, change anything about the case. They argued that the EPA broke the law by canceling the grants, and that the OBBBA can’t retroactively absolve the agency. They also served up a conflicting statement that Capito made about the fund to Politico in November. “We’re not gonna go claw back money,” she said. “That’s a ridiculous thought.”

Capito’s colleague Sheldon Whitehouse, a Democrat, offered additional evidence on the floor of the Senate Wednesday. He cited the Congressional Budget Office’s score of the repeal of the program of $19 million, noting that it was the amount “EPA had remaining to oversee the program” and that “at no point in our discussions with the majority, directly or in our several conversations with the Parliamentarian, was this score disputed.” Whitehouse also called up a previous statement made by Republican Representative Morgan Griffith, a member of the House Energy and Commerce Committee, during a markup of the bill. “I just want to point out that these provisions that we are talking about only apply as far, as this bill is concerned, to the unobligated balances,” Griffith said.

Regardless, it will be up to the D.C. Circuit Court as to whether the lower court’s injunction was warranted. If it agrees, the nonprofit awardees may still, in fact, be able to get the money flowing for clean energy projects.

“Wishful thinking on the part of DOJ does not moot the ongoing litigation,” Whitehouse said.

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Hotspots

GOP Lawmaker Asks FAA to Rescind Wind Farm Approval

And more on the week’s biggest fights around renewable energy.

The United States.
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1. Benton County, Washington – The Horse Heaven wind farm in Washington State could become the next Lava Ridge — if the Federal Aviation Administration wants to take up the cause.

  • On Monday, Dan Newhouse, Republican congressman of Washington, sent a letter to the FAA asking them to review previous approvals for Horse Heaven, claiming that the project’s development would significantly impede upon air traffic into the third largest airport in the state, which he said is located ten miles from the project site. To make this claim Newhouse relied entirely on the height of the turbines. He did not reference any specific study finding issues.
  • There’s a wee bit of irony here: Horse Heaven – a project proposed by Scout Clean Energy – first set up an agreement to avoid air navigation issues under the first Trump administration. Nevertheless, Newhouse asked the agency to revisit the determination. “There remains a great deal of concern about its impact on safe and reliable air operations,” he wrote. “I believe a rigorous re-examination of the prior determination of no hazard is essential to properly and accurately assess this project’s impact on the community.”
  • The “concern” Newhouse is referencing: a letter sent from residents in his district in eastern Washington whose fight against Horse Heaven I previously chronicled a full year ago for The Fight. In a letter to the FAA in September, which Newhouse endorsed, these residents wrote there were flaws under the first agreement for Horse Heaven that failed to take into account the full height of the turbines.
  • I was first to chronicle the risk of the FAA grounding wind project development at the beginning of the Trump administration. If this cause is taken up by the agency I do believe it will send chills down the spines of other project developers because, up until now, the agency has not been weaponized against the wind industry like the Interior Department or other vectors of the Transportation Department (the FAA is under their purview).
  • When asked for comment, FAA spokesman Steven Kulm told me: “We will respond to the Congressman directly.” Kulm did not respond to an additional request for comment on whether the agency agreed with the claims about Horse Heaven impacting air traffic.

2. Dukes County, Massachusetts – The Trump administration signaled this week it will rescind the approvals for the New England 1 offshore wind project.

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Q&A

How Rep. Sean Casten Is Thinking of Permitting Reform

A conversation with the co-chair of the House Sustainable Energy and Environment Coalition

Rep. Sean Casten.
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This week’s conversation is with Rep. Sean Casten, co-chair of the House Sustainable Energy and Environment Coalition – a group of climate hawkish Democratic lawmakers in the U.S. House of Representatives. Casten and another lawmaker, Rep. Mike Levin, recently released the coalition’s priority permitting reform package known as the Cheap Energy Act, which stands in stark contrast to many of the permitting ideas gaining Republican support in Congress today. I reached out to talk about the state of play on permitting, where renewables projects fit on Democrats’ priority list in bipartisan talks, and whether lawmakers will ever address the major barrier we talk about every week here in The Fight: local control. Our chat wound up immensely informative and this is maybe my favorite Q&A I’ve had the liberty to write so far in this newsletter’s history.

The following conversation was lightly edited for clarity.

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Spotlight

How to Build a Wind Farm in Trump’s America

A renewables project runs into trouble — and wins.

North Dakota and wind turbines.
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It turns out that in order to get a wind farm approved in Trump’s America, you have to treat the project like a local election. One developer working in North Dakota showed the blueprint.

Earlier this year, we chronicled the Longspur wind project, a 200-megawatt project in North Dakota that would primarily feed energy west to Minnesota. In Morton County where it would be built, local zoning officials seemed prepared to reject the project – a significant turn given the region’s history of supporting wind energy development. Based on testimony at the zoning hearing about Longspur, it was clear this was because there’s already lots of turbines spinning in Morton County and there was a danger of oversaturation that could tip one of the few friendly places for wind power against its growth. Longspur is backed by Allete, a subsidiary of Minnesota Power, and is supposed to help the utility meet its decarbonization targets.

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