The uncertainty surrounding the current federal funding for clean energy projects has left many stakeholders in confusion. Recent reports indicate communication difficulties with the Environmental Protection Agency (EPA) and its connections to the Trump administration’s funding freeze orders, though the exact relationship remains ambiguous.
Upon contacting the EPA’s media-relations line in Washington, D.C., callers are met with a disconnected line. An email inquiry to an EPA representative redirected Canary Media to the U.S. Department of Justice, which declined to comment on the matter. Meanwhile, Anna Kramer of NOTUS revealed in a social media post that an EPA official mentioned a pause on funding actions related to the Inflation Reduction Act and the Infrastructure Investment and Jobs Act.
Legal obligations for federal grants are defined in agreements that require agencies to make payments, as noted in a memo from Harvard Law School’s Environmental and Energy Law Program. Payments must be processed through portals such as the Automated Standard Application for Payments (ASAP), a system developed by the Bureau of the Fiscal Service and the Federal Reserve Bank of Kansas City.
Despite these legal frameworks, concerns have been raised about the legality of pausing funding. Hoover criticized the federal actions, arguing it attempts to “illegally throttle the flow of funding.” He explained that most grantees do not receive full funding upfront; instead, they draw from federal accounts to cover ongoing expenses.
The Impoundment Control Act is a significant legal barrier to withholding funds for policy reasons, as the President cannot refuse to disburse funds mandated by Congress. However, Hoover emphasized that existing regulations clearly prohibit shutting off payments, noting that grantees in compliance with financial controls must receive advance payments.
A Looming Legal Struggle
The Trump administration’s actions to freeze spending from infrastructure laws and the Inflation Reduction Act have sparked legal debates. The Office of Management and Budget and the National Economic Council hold the discretion to resume funding. Vought, Trump’s OMB nominee, has faced criticism for questioning the constitutionality of the Impoundment Control Act during recent Senate hearings.
Legal challenges may arise from affected entities, suggests Jaron Goddard, an attorney specializing in energy and climate law. She stated that federal agencies cannot arbitrarily terminate grant agreements, and any such actions could potentially be contested. However, the process might be complex and lengthy.
Federal agencies have other methods to slow funds, such as alleging contract violations by grantees. The Harvard memo indicates that grant terms might allow for termination if the award no longer meets its intended goals, but these terms must be explicit in the agreement.
The uncertainty surrounding energy funding is problematic for both clean energy initiatives and the Trump administration’s objectives to reduce energy costs and boost U.S. manufacturing. Sanjay Narayan from Sierra Club noted that stable regulations are crucial for market predictability and long-term investment in manufacturing.
Original Story at www.canarymedia.com