How 3 IRA projects are dealing with the spending freeze

After a week of confusion stemming from blocked funding, projects are slowing down in numerous ways.

President Donald Trump’s administration continued to freeze federal funding Wednesday. | Francis Chung/POLITICO

By Jean Chemnick

Some groups that are frozen out of accessing federal climate money are waiting to hire new staff members. Others are worried about paying their employees, or rent. Still others are delaying solar projects by not signing contracts with communities, for fear of not fulfilling them.

Then there are those who believe the worst — that the freeze could permanently end their work.

More than a week after President Donald Trump plunged the government into chaos by halting federal grants, the effects of frozen funding for Inflation Reduction Act programs are biting deeper, according to numerous grant recipients — many of whom spoke on background to avoid reprisals.

Billions of dollars in fully obligated grants were still frozen Wednesday, despite two court orders requiring the Trump administration to release the money.

“Look, we’re frustrated, right?” said Mike Foley, the administrator of Cuyahoga Green Energy, a public microgrid and renewable energy utility in Cuyahoga County, Ohio. “These were hard grants to get. We want to move forward with them and do the work.”

His group is working with partners on three Inflation Reduction Act grants — $156 million for a low-income solar program spanning eight states, money for a high school solar program, and $129 million to clean up contaminated land and install renewable energy to replace power from a retiring coal plant.

That last project, which is funded by the Inflation Reduction Act’s Climate Pollution Reduction Grants, will erect solar equipment at several former landfills around Cuyahoga County.

But hundreds of projects like that one are waiting for a green light from Trump’s new EPA team. On Tuesday, EPA’s acting financial chief, Gregg Treml, sent agency staff a memo advising that Inflation Reduction Act and infrastructure funds would be released because of a court order Monday.

But a list of effected programs released later by the agency showed that all but one Inflation Reduction Act grant program remained frozen. The infrastructure law’s Clean School Bus Program is also in limbo.

“Neither the EPA nor the Dept. of Justice can comment on pending litigation,” EPA spokesperson Jeff Landis told POLITICO’s E&E News in a statement.

EPA isn’t alone — Inflation Reduction Act grant recipients under the Agriculture and Energy departments were also shut out of the federal grant portal that is used to distribute money.

As the freeze drags on, grant recipients are left without answers.

Foley, of the Ohio utility, said the project would relieve pressure on state ratepayers, who are facing a 10 or 15 percent price hike in their electric bills starting in June.

“This is a way to mitigate some of those cost increases, because it’s local generation, and it reduces your need to take power off of the larger transmission grid,” he said. “We want to do this because we think clean energy is important, but it’s also economics at a time when there’s both fragility in the electric grid and cost increases.”

The stalled federal funding is jeopardizing those benefits, he said, as well as numerous jobs, workforce trainings and contracts that are expected to flow from those programs. 

Still, Foley said he wasn’t working on a contingency plan, at least not yet.

“We’ve got a grant agreement with a contract with the federal government through the EPA. It was legislation passed by Congress, signed by the president. We’re in good standing with EPA on these grants,” he said. “So our assumption is that at the end of the day, these things are going to happen.”

The Nevada Clean Energy Fund (NCEF), a state-created nonprofit and green bank, is also managing three frozen Inflation Reduction Act and infrastructure law grants — a low-income community solar grant under Solar for All, a Clean School Bus grant and a so-called community change grant with the Walker River Paiute Tribe.

Kirsten Stasio, its CEO, said the federal funding freeze has cascaded down to NCEF’s partners and customers, who couldn’t access funds either. The green bank had already started accepting applications for rooftop and community solar to help low-income Nevada communities lower their power bills. It’s now put that on hold until the funding is released.

“You’ve probably seen the stats, but one in five Americans — and that’s for Nevadans as well — have to make the hard choice between paying their utility bills, or paying for food and medicine,” she said. “And that choice is particularly acute in the summer for the people who live in Southern Nevada, who deal with extreme heat.”

The Clean School Bus grant is intended to benefit rural districts that can’t afford to replace their aging buses, which she said are “literally running into the ground.”

Stasio said her group told school districts to hold off on planning those purchases.

“We can’t access these funds, so we don’t want to put them in a situation where they’ve signed a contract or even spent money and can’t get this back from the federal government,” she said.

Michelle Moore, CEO of Groundswell, a nonprofit administering a Solar for All grant for mostly rural areas in eight Southern states, said her organization was working to set up its program despite the funding freeze.

“The federal freeze doesn’t mean that you don’t have to do the work. It just means that the federal government isn’t reimbursing you right now,” she said.

Like Stasio and Foley, Moore stressed that the solar program would bring price relief to poor regions of the country — as well as new jobs.

“When you look at many of the programs that were stood up under the IRA, it’s a huge investment in rural America. I would imagine the biggest in 100 years — since rural electrification,” she said, referring to the federal government’s role in bringing power to rural communities in the 1930s.

Moore said she expects the federal government will unfreeze funding after the administration has time to review how it fits into Trump’s agenda. Until then, she said, Groundswell was focused on meeting its own deadlines.

“We have contractual responsibilities to the federal government, just like the federal government has contractual responsibilities to our coalition,” she said. “But more importantly, to the rural and small town communities we’re serving.”

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