In a move that has stunned the clean-energy community, the U.S. Department of Energy’s internal watchdog has announced it will investigate the Trump administration’s decision to terminate $7.6 billion in grants for hundreds of clean-energy projects. The cuts affected 223 projects across 16 states that voted for former Vice President Kamala Harris in the 2024 presidential election.
The Scope of the Cuts
The termination of 321 funding awards in October was justified by the Energy Department as a result of a review that found the projects “did not adequately advance the nation’s energy needs, were not economically viable, and would not provide a positive return on investment of taxpayer dollars.” The cuts targeted projects in California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maryland, Massachusetts, Minnesota, New Hampshire, New Jersey, New Mexico, New York, Oregon, Vermont, and Washington-every state that had supported Harris.
White House budget director Russell Vought announced the list of states that would lose funding, while Energy Secretary Chris Wright initially described the decisions as “business decisions on whether it’s a good use of the taxpayer money or not.” The most heavily impacted state was California, where more than $1 billion-primarily earmarked for a hydrogen hub-was taken away.
A Legal Challenge Reveals Partisanship
A lawsuit filed by several clean-energy groups and the city of St. Paul prompted government lawyers to file a court document this week. The filing confirmed that the selection of grants was “influenced by whether a grantee’s address was located in a State that tends to elect … Democratic candidates in state and national elections (so-called “Blue States”).” This admission directly contradicts the Department’s earlier assertion that partisanship was not a factor in the cuts.
The lawsuit also argued that because the project funding came from the bipartisan infrastructure law passed under President Biden, the Department of Energy does not have the authority to terminate awards. The plaintiffs claim the decisions are “unlawful and will cause harm to Americans.”
Congressional Response
More than two dozen Democratic members of Congress from California-led by Senators Adam Schiff and Alex Padilla and Congresswoman Zoe Lofgren-wrote a letter to the acting inspector general in late October. They requested a formal investigation into the canceled funding and asserted that the cuts “based on partisan criteria suggests significant unlawful bias.”
In a statement, Schiff said he was pleased to see the investigation into what he called “clear political targeting … intended to punish blue states.”
Inspector General’s Letter
Sarah Nelson, acting inspector general for the Energy Department, sent a letter to members of Congress on Wednesday. She said the audit of the canceled funds will review “whether those cancellations were in accordance with established criteria.” Nelson added that the work will help ensure that these activities are conducted consistently with applicable laws, regulations, and Departmental policies and procedures.
The Department of Energy has not yet responded to a request for comment.
The Impact on Jobs and Energy Prices
Democratic lawmakers warned that the cuts would slash projects that boost the electric grid, threaten thousands of manufacturing and construction jobs, and send Americans’ energy costs soaring. The cuts were portrayed as part of a broader attack by President Donald Trump on climate programs and clean-energy funding.
Key Takeaways
- DOE’s internal watchdog will investigate the $7.6 billion in grant cuts that targeted 16 blue states.
- A lawsuit revealed the cuts were influenced by the political leanings of the states where grantees were located.
- California lost more than $1 billion, including funding for a hydrogen hub, making it the hardest hit.
- Congressional members from California have requested a formal investigation, citing unlawful bias.
- The Inspector General’s review will determine if the cancellations complied with established criteria and federal law.
Closing Thoughts
The investigation underscores a growing tension between federal funding decisions and partisan politics. As the Inspector General’s review proceeds, stakeholders will watch closely to see whether the Department of Energy’s actions align with the legal framework established by the bipartisan infrastructure law and federal procurement regulations. The outcome could set a precedent for how clean-energy grants are awarded and protected from political influence in the future.
