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Billions for clean energy caught in a partisan tug of war

House appropriators aim to claw the money back

Rep. Gary Palmer, R-Ala., called the greenhouse gas program a 'slush fund' and offered legislation to repeal it.
Rep. Gary Palmer, R-Ala., called the greenhouse gas program a 'slush fund' and offered legislation to repeal it. (Bill Clark/CQ Roll Call file photo)

The next few months will be critical for the success or failure of the biggest environmental program in last year’s climate, tax and health care law: the $27 billion Greenhouse Gas Reduction Fund.

While Republicans are proposing to rescind large portions of the fund in fiscal 2024 appropriations bills, the EPA is working to enlist organizations that will be tasked with putting the money into action, particularly in communities that have suffered disproportionately from environmental degradation.

The EPA laid out plans for divvying up the fund through three separate grant competitions. Groups have until Sept. 26 to apply for grants from the $7 billion “Solar for All” program and the deadline is Oct. 12 to seek funds from the other two tranches: a $14 billion fund for clean technology projects and a $6 billion fund for developing clean energy in disadvantaged communities.

“The ball is now in the court of the applicants, to show how they will ensure the money flows into real projects and how they will invest in the technical assistance that’s needed,” said Dale Bryk, director of state and regional policies at the Harvard Environmental and Energy Law Program, which assessed the EPA’s implementation plans in comments submitted to the agency in May.

Once the applications are filed, the EPA says it will select two or three “national clean financing institutions” to distribute money from the $14 billion fund, with the goal of providing financing for “tens of thousands of clean technology projects nationwide.” Grants from the $6 billion Clean Communities Investment Accelerator will go to as many as seven “hub nonprofit organizations” that will funnel funding and technical assistance to groups in low-income and disadvantaged communities for clean energy projects.

Finally, the $7 billion Solar for All fund will be divided among 60 programs run by states, territories, tribes, municipalities and nonprofits providing financing and technical assistance for residential solar projects in disadvantaged communities. 

Provisions in the climate law enacted a year ago give the EPA until Sept. 30, 2024, to distribute monies from the fund.

“I think Congress gave the EPA a really big job with the Greenhouse Gas Reduction Fund,” said Trevor Higgins of the Center for American Progress, a Washington progressive group that is tracking the fund’s implementation. “There’s a large amount of money to create a new program and to do it quickly.”

The EPA said in an email that it hopes to select fund recipients by March so the money can begin flowing into projects next summer.

“EPA has brought on a dedicated team within the Office of the Administrator and is leveraging resources across the EPA as well as the entire federal government,” the agency said about its implementation plans.

The process will be conducted amid vocal criticism from congressional Republicans. A bill to repeal the fund was included in a package of energy bills approved by the House in March. The bill’s sponsor, Rep. Gary Palmer, R-Ala., said during a markup in the Energy and Commerce Committee that the program was a “slush fund,” and the committee said in its majority report that the fund would be used to “pursue financing with limited oversight and will conflict with taxpayer interests.”

The EPA responded that “Americans all across the country will benefit from the hundreds of thousands of projects that are funded by this historic $27 billion investment. It is a top EPA priority to implement and manage these agency resources with transparency, efficiency, and effectiveness to deliver meaningful results for the American people.” 

Meanwhile, two of the fiscal 2024 appropriations bills advanced through committee by House Republicans would rescind nearly $19 billion from the fund, with $11.1 billion going to the State-Foreign Operations measure and $7.8 billion moved to the Interior-Environment bill.

The environmental group Evergreen Action said in a July news release that Republicans are shooting themselves in the foot by trying to rescind funding from the climate law that Democrats dubbed the Inflation Reduction Act. 

“The conservative majority in the House may continue to lob baseless attacks at the IRA, but in doing so they are quite literally doing the worst harm to their own constituents,” the group said. “Since the IRA became law, more than 140,000 new clean energy jobs have already been created, while hundreds of billions of dollars in private and public investments have popped up in every corner of the country. And approximately two-thirds of those new investments are going straight into Republican districts.”

A new group launched this month by the Conservative Energy Network, which advocates “free market growth” of clean energy, is promoting community solar projects in states including Indiana, Michigan, Ohio and Virginia.

But when asked whether the new Community Solar Freedom Coalition supports House GOP efforts to rescind solar funding in the Greenhouse Gas Reduction Fund, the network’s director of external affairs, Tyler Duvelius, didn’t respond directly.

“CSFC believes that we shouldn’t waste opportunities to expand community solar access,” he said in an emailed statement. “Community solar development saves individuals and small businesses money, creates American jobs, and strengthens our energy grid.”

Bryk, of the Harvard Environmental and Energy Law Program, said criticism of the fund will die down once the federal spending starts to show results.

“I think it will be great to see the applications and the winners,” she said. “That’s what will counter those criticisms, when people can see that what we’re talking about is dramatically improving the quality of affordable housing in your state.”

Adding solar power to a community often brings other improvements, such as roof repairs, mold removal, weatherization and new electrical panels, not to mention reduced energy costs as electricity replaces more expensive fossil fuels for heating, Bryk said.

“And once your constituents are getting those benefits, the ones who aren’t getting it who live next door are going to want it,” she said. “So you’re going to claw back money from things that are delivering real benefits to your constituents? No. It’s only when you don’t have any confidence that that’s what’s going to happen that you can say those things.”

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