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Companies, states, cities, and other entities with Energy Department contracts that had community benefit plans embedded in them have been ordered to stop all work.
Amidst the chaos surrounding President Trump’s pause on infrastructure and climate spending, another federal funding freeze is going very much under the radar, undermining energy and resilience projects across the U.S. and its territories.
Days after Trump took office, acting Energy Secretary Ingrid Kolb reportedly told DOE in a memo to suspend any work “requiring, using, or enforcing Community Benefit Plans, and requiring, using, or enforcing Justice40 requirements, conditions, or principles” in any loan or loan guarantee, any grant, any cost-sharing agreement or any “contracts, contract awards, or any other source of financial assistance.” The memo stipulated this would apply to “existing” awards, grants, contracts and other financial assistance, according to E&E News’ Hannah Northey, who first reported the document’s existence.
Justice40 was Biden’s signature environmental justice initiative. Community benefit plans were often used by Biden’s DOE to strengthen the potential benefits that projects could have on surrounding local economies and were seen as a vehicle for environmental justice. When we say often, we mean it: some high profile examples of these plans include those used for the Holtec Palisades nuclear plant restart in Michigan and the agency’s battery materials processing and recycling awards.
After Kolb’s edict went out, companies, states, cities, and other entities with DOE contracts that had community benefit plans embedded in them were ordered to stop all work, according to multiple letters to contract recipients reviewed by Heatmap News. “Recipients and subrecipients must cease any activities, including contracted activities, and stop incurring costs associated with DEI and CBP activities effective as of the date of this letter,” one letter reads, adding: “Costs incurred after the date of this letter will not be reimbursed.”
One such letter was posted by the University of Michigan research department in an advisory notice. The department’s website summarizes the letter as “directing the suspension” of all work tied to “any source of DOE funding” if it in any way involved “diversity, equity, and inclusion (DEI) programs,” as well as Justice40 requirements and community benefits plans.
These letters state companies and other entities with community benefit plans in their contracts or otherwise involved in their funding awards would be contacted by DOE to make “modifications” to their contracts. They only cite President Trump’s executive orders that purportedly address Diversity, Equity and Inclusion practices; they do not cite a much-debated Office of Management and Budget memo freezing all infrastructure law and Inflation Reduction Act spending, which has been challenged in federal court. It is altogether unclear if any outcome of the OMB memo litigation is even relevant to this other freeze.
We reached out to the Energy Department about these letters for comment on how many entities may be impacted and why they targeted community benefit plans. We will update this story if we hear back.
A lot is still murky about this situation. It is unclear how many entities have been impacted and the totality of the impacts may be unknown for a while, because a lot of these entities supposed to get money may want to keep fighting privately to, well, still get their money. It’s also hazy if all entities that received these letters are continuing to do any construction or preparatory work or other labor connected to their funding not tied to the community benefit planning, or just halting the funded labor altogether.
The blast radius from this freeze is hard to parse, said Matthew Tejada, a former EPA staffer who most recently served as the agency’s deputy assistant administrator for environmental justice under the Biden administration. Tejada, who now works for the advocacy group NRDC and remains connected to advocates in the environmental justice space, said he was very much aware of this separate freeze when he was first reached by Heatmap. But “unless you’re able to really have a network of information bottom up from the recipients, it’s a bit of a black box we’re operating around because we’re not going to get transparency and information from the administration.“
“Part of their obvious strategy here is to create enough confusion as possible to make defending as difficult as possible. But I’m fairly certain the community and various others here -- local governments, tribes -- will have plenty to say about cutting through that chaos to make sure the will of Congress and the outcomes of these programs and projects are delivered upon.” He believes that any attempts to modify these contract awards “on the pretext of canceling the contract[s] will in all likelihood meet a legal challenge.”
But the ripple effects of this other freeze are starting to surface in local news accounts.
According to the Erie Times-News, the city of Erie, Pennsylvania currently cannot access funding for a city-wide audit for home energy efficiency. And a big road improvement project in the Mariana Islands – a U.S. territory – was nearly derailed by the freeze, according to the news outlet Mariana’s Variety, which reported project developers are just going to try and move forward without the remaining money provided under contract.
We’ll have to wait and see the breadth of the impacts here and whether this freeze will produce its own legal or regulatory rollercoaster. Hang on tight.
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The Trump administration appears to be advancing solar projects through the permitting process now.
After a temporary halt to permitting for solar projects, the Bureau of Land Management told me a few weeks ago that it had lifted the pause, but I had told you I would wait for confirmation to see whether projects could actually move through government permitting. On Friday, the Bureau of Land Management publicly confirmed that federal solar permitting can happen again, formally approving the Leeward Renewable’s Elisabeth solar project in Yuma County, Arizona – what appears to be the first utility-scale solar facility on federal acreage approved by the Trump administration.
The Elisabeth project is located in a remote part of southwestern Arizona in the Agua Caliente Solar Energy Zone, an area designated for solar energy leasing that has existed for more than a decade, and is adjacent to other large solar projects that have been previously approved according to BLM.
On the same day, BLM released a draft environmental review of a separate solar project in Arizona that the agency segregated land for late last year at the same time as Elisabeth: the Avantus’ Pinyon solar-plus-storage project, which is open for public comment through late May. Tucked on page 37 of that draft document was a list of other solar projects in the nearby vicinity on federal lands that have yet to enter the federal permitting process under the National Environmental Policy Act, which BLM dubbed as “reasonably foreseeable” impacts to the cumulative environment.
The fact BLM is willing to admit other solar projects could advance later on is significant after the sputtering seen in the earliest days of the Trump administration. We’d seen hints of progress seeping through updates to BLM webpages. In mid April, we reported the agency quietly updated the timetable for the Esmerelda 7 mega-solar project in Nevada to say the agency would issue a final decision on the project this summer. I took a peek through the BLM data and found other examples of the same thing, including the Bonanza solar farm, which is now expected to receive its final environmental impact statement in June according to the project website.
BLM has also moved forward with transmission lines on federal lands that would go to solar projects off federal lands, indicating a level of agnosticism about connecting solar farms to the grid if the energy is generated on private property.
It’s still not clear whether solar permits will be a steady trickle for the foreseeable future or if this form of renewable energy could benefit from the Trump administration’s desires to maximize energy generation. Take all of this with a grain of salt because at any moment, a news cycle or disgruntled legislator could steal the president’s ear and make him angry at solar power.
But in times as chaotic as these for U.S. renewables developers, we’ll take this ray of sunshine.
Let’s play out what could happen as the House Ways and Means Committee does its work.
One of the most important fights over the Inflation Reduction Act’s survival has finally arrived. But it’s not playing out in the open. It’s happening behind the closed doors of a powerful House committee in charge of tax policy.
The House Ways and Means Committee is writing its version of Republicans’ budget reconciliation bill, the centerpiece of President Donald Trump’s legislative agenda. The committee could release that text as soon as next week. And other than a few broad outlines — the text will extend Trump’s tax cuts for the wealthy, and it will increase the deficit by no more than $2.8 trillion — nobody has any idea what it will say.
Whatever the final text, though, will give us the first real sense of how likely the Inflation Reduction Act’s tax credits are to survive in the Trump tax bill. After months of speculation and tea leaf-reading, the House Ways and Means Committee’s draft will represent an opening position of sorts for Republican leadership — and illustrate just how close to repeal the majority is willing to get.
The committee could take a scorched-earth approach, cutting essentially every IRA tax credit in order to force members to fight to get policies back into the final bill. Or it could reform some tax credits so significantly that it effectively repeals the IRA, even if many policies remain on the books.
It could also reform some credits — such as the electric vehicle and clean electricity tax credits — while leaving most others untouched.
The most important suggestion of what will be in the final version came on Thursday in a new letter addressed to Jason Smith, the Ways and Means Committee chairman, and signed by 38 House Republicans. The letter demands the IRA’s full repeal — essentially heralding a potential new “anti-IRA” caucus within the GOP.
“We are deeply concerned that President Trump’s commitment to restoring American energy dominance and ending what he calls the ’‘green new scam’ is being undermined by parochial interests and short-sighted political calculations,” the letter says.
The letter writers focus their ire on subsidies for “wind and biofuel[s] … carbon capture and hydrogen … [and] solar and electric vehicles” that they say form the backbone of the bill.
So far, House Republicans have largely written letters about the IRA to call for its preservation. Last summer, 18 House Republicans wrote to Speaker of the House Mike Johnson to ask him to move gingerly around any “repeal or reform” of the tax credits should Republicans win the November election.
“We must reverse the policies which refine American families while protecting and refining those that are making our country more energy independent and America more energy secure,” the letter said.
Since then, the number of pro-IRA voices in the GOP has risen. Last month, 21 House Republicans wrote to Johnson again in support of the law. But their language was slightly changed, advising that any reforms proceed in a “targeted and pragmatic fashion.” They did, however, oppose “premature credit phase outs” or restrictions on transferability.
Speaking earlier this week at a Semafor event, the Illinois Republican and Ways and Means member Darin LaHood imagined phasing out some of the energy tax credits earlier.
“The approach we’'re looking at now is how you have an appropriate ramp-down [of IRA tax credits] that allows for businesses and companies to continue to be active in this space, but also saves money," LaHood said.
He added that there is a “bullseye” on the clean energy law, and said that “we’ll see” whether any of its provisions are preserved.
Whatever form the final law takes, this legislative vehicle will likely determine the fate of the IRA’s energy tax credits and other climate spending. Trump has lambasted the IRA, and some Republicans believe that its tax credits should be repealed to pay for their tax cuts for wealthy earners.
Ways and Means will not automatically control the final product. Ultimately, they will have to reconcile their version of the text with what’s written by their counterpart, the Senate Finance Committee. Other committees will oversee the IRA’s environmental grants and loans. (My colleague Emily Pontecorvo wrote about the first markup — from the House Transportation and Infrastructure Committee — on Tuesday.) But the Senate has a more forgiving budget target than the House does, which means the Ways and Means Committee is where the IRA could go to die. That’s because it oversees tax policy — and therefore manages the IRA’s all-important tax credits.
The committee also has a spending problem. The legislative process Republicans have chosen to pass their budget bill, known as reconciliation, begins with establishing binding spending limits for committees in both the House and the Senate. That process wrapped up last month.
Under the guidelines passed by the House earlier this year, the Ways and Means Committee can expand the deficit by as much as $4.5 trillion. But simply extending the 2017 tax cuts’ expiring provisions will cost $4.4 trillion — and the committee wants to do more besides, including expanding the deductions that people can claim for their local and state taxes. The committee will struggle to pay for everything it wants to do — and it could look to repealing parts of the IRA to fix it.
It doesn’t help that Representative Jason Smith of Missouri, the Ways and Means chairman, has called the IRA “welfare for the wealthy and well-connected.”
The committee’s conservative bent — and the fact that GOP lawmakers broadly want to stay on track to pass a bill by the end of the summer — mean that the IRA tax cuts are especially vulnerable during this period.
Most of the IRA’s tax credits are due to sunset in 2032. But one measure — a technology-neutral credit to support new clean electricity generation — could run for much longer than that.
Under the law as it stands today, that credit is supposed to last until the United States eliminates much of the greenhouse gas emissions produced by its power grid as compared to 2022 levels. Even if the credit remains in place, that could take another 30 or 40 years to happen, by one estimate — making the tech-neutral tax credit one of the most important climate policies in the law. The IRA’s power sector policies are responsible for more than 80% of the law’s emissions-reducing impact.
That also makes it among the most expensive policies in the law. When Republicans talk about ending tax credits early, the tech-neutral tax credit is an obvious target. Two lawmakers from North Dakota — Representative Julie Fedorchak and Senator Kevin Cramer — are working on language to phase out some tax credits in five years, Axios Pro has reported.
That would shut down the credit by 2030. But ending the credit by then could reshape what kind of energy technologies the law supports. Republicans tend not to see all zero-carbon electricity equally — while they often champion nuclear and advanced geothermal generation, many look less favorably on wind and solar power.
But by terminating the tech-neutral tax credit at the end of the decade, Republicans could help essentially the very technologies they don’t want. There are no new nuclear or geothermal projects in the development pipeline across the country, and new ones are unlikely to crop up until the late 2020s at the earliest. Under the law, energy projects must be “placed in service” by the time a tax credit expires, meaning that virtually no new nuclear or geothermal projects could qualify.
New nuclear projects will face especially serious trouble if the Trump administration guts the Department of Energy’s in-house bank, the Loan Programs Office, as now seems likely.
At the same time, there are plenty of new solar and battery projects planned across the country. Developers of these projects could rush to get them into service before a potential 2029 sunset date. The industry even has experience hurrying projects to completion: It often had to do so during the 2010s, when the solar investment tax credit faced repeated expirations.
Other Republicans have suggested terminating the law’s transferability clause. Under the IRA as it stands today, companies can sell their tax credits to other firms that can better use the subsidy. Depending on how it’s implemented, that reform could hurt the IRA by reducing the value of its tax credits, because companies will have to adopt more complicated financial structures in order to claim a given subsidy. Historically, solar and wind developers have more experience adopting these arcane structures than the nuclear or geothermal industries, which have fewer projects under their belt.
Speaking at a Heatmap event on Thursday, Republican Senator John Curtis of Utah said he was still hopeful that the IRA would survive without significant cuts.
“I don’t think that makes it through the House,” he said when asked if the Ways and Means Committee could slash the IRA tax credits outright. “There’s a lot of insecurities in the Republican Party about not cutting and about where the boundaries are.”
We’ll have a much better sense of where those boundaries are soon.
And more of the week’s top news in renewable energy conflicts.
1. Hampden County, Massachusetts – Disgruntled residents in the small city of Westfield have won their fight against a Jupiter Power battery storage project.
2. Staten Island, New York – Speaking of people booing battery storage, the battle over BESS on Staten Island is potentially turning into major litigation.
3. Montgomery County, Maryland – County planners have approved a small solar farm on agricultural lands in the small D.C. exurb of Rockville surprising even the project’s developer Chaberton Energy.
4. Mecklenburg County, Virginia – A 90-acre RWE solar project has been rejected for the second time by county officials despite the developer slimming down the project size in response to local complaints.
5. Licking County, Ohio – The Ohio Supreme Court is allowing Open Road Renewables’ utility-scale Harvey Solar project to proceed over objections from angry neighbors.
6. Adams County, Illinois – It’s not all sunshine and roses in the Midwest though, as even a relatively tiny solar farm is struggling to get approval in rural Illinois.
7. Pierce County, Wisconsin – An AES utility-scale solar farm is getting significant pushback from surrounding residents over farmland impacts.
8. Dickinson County, Iowa – Invenergy has removed some turbines from its Red Rock Wind Energy Center in a bid to try and overcome a vocal contingent of opposition in the county.
9. Cedar County, Iowa – Elsewhere in the Hawkeye State, an Iowa farmer is suing Nordex claiming that a wind turbine fire damaged his wheat crop.
10. Lincoln County, Oklahoma – A battery storage facility proposed by Black Mountain is the subject of an investigative news article about opposition to BESS in Oklahoma.
11. Santa Barbara County, California – The backlash to the Moss Landing battery fire has now led the central coast city of Santa Maria to ban new battery storage facilities.