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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 facility will power OpenAI’s 10-gigawatt data center in Pike County, Ohio.
The Trump administration aims to complete its environmental review of what would be the biggest fossil fuel power project in the country in just a few months, Heatmap has learned.
This news follows Monday’s announcement from OpenAI that it intends to lease a new 10-gigawatt data center under development in Pike County, Ohio, financed by a mixture of money from a SoftBank subsidiary and the chip company Nvidia. This AI hyperscale facility — known as the PORTS-Pike project — is expected to draw power from the largest gas power facility ever built in the United States, a 9.2-gigawatt facility sited on federal lands that would be built and owned by the Energy Department.
According to OpenAI, the data center campus will be built and started up in phases, with the first 800 megawatts starting construction this year and operational in 2028. That first phase will rely mostly on existing power infrastructure operated by AEP Ohio. How things progress from there will depend at least in part on the permitting and construction timelines for the new power plant.
Building large infrastructure of any kind on federal land or with significant federal investment typically triggers a review under the National Environmental Policy Act. I’ve been curious to find out what kind of review this particular project was going to get, especially after the administration allowed a NEPA review for a solar project to be repurposed for a data center on federal lands earlier this year.
Turns out some information about the PORTS-Pike permitting process is public. Before OpenAI confirmed its involvement with the site, the Trump administration added the project to the federal FAST-41 permitting dashboard, where it posts regular updates on the timeline for getting federal sign-offs. Per the lone federal notice available about the PORTS-Pike project, it will include “several data center buildings and power plants.” That will require at least two federal greenlights: an Army Corps of Engineers permit and approval from the Fish and Wildlife Service, which is being consulted about potential endangered bats in the project area.
The NEPA permitting work for this historically large data center-plus-fossil fuel power project began on July 10 and will conclude on December 23, the day before Christmas Eve, according to the Trump administration’s estimates. This comes after paperwork to begin the review was submitted to the Army Corps in May, per the federal notice — a total timeline of about seven months.
Those familiar with NEPA and the debate over permitting reform will likely be surprised by the speed of this review. It’s moving fast in part because the project is receiving just an Environmental Assessment, the lesser and smaller type of analysis than the EIS. I do not know why the government decided to take this route because the government’s NEPA review determination is not currently public, but I have asked the Army Corps to explain this move.
I’m not sure exactly how air permitting will fit into this NEPA review, as the Clean Air Act isn’t listed as a review step on the federal dashboard. The Ohio EPA has primary authority over permitting projects like these under the Clean Air Act, and I’ve reached out to them to confirm whether PORTS has submitted a permitting application. The state agency’s permitting database does not have any information on air permitting for the project, though it does include reports from third-party consultants confirming wetlands and protected species warranted reviews from the Army Corps and Fish and Wildlife.
Lastly, these timetables are not sacrosanct. Under the Fiscal Responsibility Act of 2023, agencies are supposed to complete environmental assessments within one year, but nevertheless they regularly fail to meet them. The White House’s Council on Environmental Quality said in a report to Congress last year that from mid-2023 to mid-2025, the Army Corps was the agency that most often missed these statutory NEPA deadlines for environmental assessments.
Still, news of this speedy review for a priority Trump project is sure to excite pro-data center advocates who see expedited construction as an imperative in the global AI arms race. It’s also guaranteed to put a foul taste in the mouths of environmentalists already frustrated by federal revisions to NEPA regulations they say elide analysis of climate impacts.
What’s undebatable in all this is that, as my colleague Robinson Meyer wrote, the PORTS project could ignite a new era of mega-gas plants. This permitting timeline couldn’t be more important for the future of the data center boom — and the nation’s greenhouse gas emissions.
SB Energy, the SoftBank subsidiary behind the data center project, did not provide comment before publication.
A new front opens in the data center wars.
A series of lawsuits filed in federal court asks a big question – are data center moratoria constitutional?
In early August, data center developer DC Blox sued the city of Nashville in federal court to overturn a zoning moratorium stopping them from building a hyperscale facility adjacent to the city zoo. “The Data Center Moratorium, moreover, is a targeted attack against DC BLOX, in violation of federal constitutional protections,” the suit argued, claiming that it defied the corporation’s due process and equal protection rights.
Around the same time, another developer – Wixom Industrial One – filed a federal lawsuit against the city of Wixom, Michigan, to try and “invalidate the city’s illegal police power moratorium” blocking their data center.
These two cases were far from novel or the first of their kind, and they’re now a fresh front in the battle over hyperscale data centers. At least that’s what some who work on these cases say: In April, attorneys with the law firm Vorys published a “client alert” asserting “many moratoria may be vulnerable to statutory, procedural, and constitutional challenges.” The attorneys advised that constitutional arguments against moratoria “may be stronger where a government singles out data centers without a sound factual basis, treats similar land uses differently without a reasonable basis, or adopts a restriction driven more by political pressure than by defensible planning or regulatory objectives.”
Months later, according to court documents, the Vorys attorneys who authored the alert now represent real estate firm Thor Equities in a federal case against the Ohio city of Urbana, arguing the city’s decision to reject their data center project broke “fundamental protections” under the U.S. Constitution. (Vorys and Thor Equities did not respond to requests for comment.)
It’s unclear how many of these kinds of cases have been filed to date. Data on federal court cases is quite opaque. But legal experts and industry attorneys tell me we should expect them to be on the rise as developers seek whatever tools they can find to get projects built.
“Bringing a lawsuit like this is fairly cheap, something they can do at a relatively low cost, and imposes a real cost on local governments to defend themselves,” said Daniel Metzger, director of the Cities Climate Law Initiative at Columbia Law School’s Sabin Center. “The cases out there will be bellwethers. And if successful, there’ll be a lot more of them.”
What developers probably want looks a lot like Hill County, Texas, where an LLC proposing an $80 million data center project was stymied in May by the state’s first countywide moratorium. (It predated Governor Greg Abbott’s temporary freeze of data center development in Texas by three months.) Within a period of only a few weeks, the LLC sued and the county rescinded the pause on approvals. The case was dropped a month later. Local reports state the county had to afterwards pay the corporation $100,000 in legal fees – a drop in the bucket compared to what a drawn-out court battle would have cost the rural county.
Metzger said whether the companies will win these cases is ultimately not the point – their goal is to win a finished data center, not a judicial ruling. By filing expansive litigation in the national court system, a hypothetical developer can exhaust the coffers of a city or county with legal expenses that are chump change compared to would-be billions in private financing for compute infrastructure.
“These lawsuits may deter some local governments from taking steps to oppose data center development, just because of the cost it would impose on them to defend a lawsuit, even if they know they have a strong legal basis for the action they want to take.”
Those I spoke to in private practice about data center developers’ constitutional arguments agreed with Metzger’s assessment that it’s too early to tell whether the companies will win. Generally, they said, a city or county will win this kind of case if it demonstrates a rational basis for its decision-making and courts typically want to defer to governmental autonomy. The onus will be on the developers to prove a moratorium was meritless – that’s the due process challenge – or unfairly targeted their industry in a way other sectors don’t face, which is the basis of the equal protection claim.
“What they’re saying is in essence that these actions the municipality is taking are arbitrary and capricious, which is one of the sort of catch-all standards,” Thomas Allen, a partner at K&L Gates, told me. “They say the laws lack a rational basis. And then they make equal protection claims, saying data centers are being singled out because of political concerns as opposed to actual things relevant to the legislature’s directive. They’re not basing their decisions on the underlying merits of the project but reacting to political pressure.”
“It’s a reliance question and it’s about the treatment of their projects,” added Laura Morton, an attorney with Ashurst Perkins Coie. “It’s always been important to talk about and engage with communities where your infrastructure is planned. Here, I think this is the developers going in, maybe having conversations, and then suddenly they’re getting a reversal after already receiving these approvals and making investments based off of what the conversations and rules were.”
The likelihood of these constitutional challenges reaching higher courts anytime soon is quite low. It’ll be a long time before we see one of these cases reach a verdict, let alone some kind of appeals process come to fruition. Nevertheless, the new legal ambiguity around these local restrictions is an important new facet of the data center wars, including for developers.
“Companies want to act within the law to get [things] done, so whatever tactics they can do to help get the project over the line that are legal and ethical, they may try those,” Allen told me. “And if that includes the pressure of a lawsuit, that’s a judgment they’ll have to make.”
And more on this week’s conflicts around project development.
1. Montgomery County, Pennsylvania – We reached a new normal in the data center backlash, and it all seems to have started in King of Prussia.
2. Columbia County, Wisconsin – The gubernatorial race in this state is transforming local fights over wind projects into must-watch popcorn fodder for anyone obsessed with the state of the energy transition, or national politics for that matter.
3. Shelby County, Alabama – One quick update on the intervention of John Rich, the country star turned Trump’s “special envoy for American landowners,” in an Alabama Power transmission project: it’s getting a lot more elected officials involved.
4. New Jersey – We try to conclude every Hotspots on a positive note. So this week’s silver lining comes to you from the Garden State, where state regulators have approved more than a dozen agrivoltaics projects.