A three-judge federal appeals court panel has approved the drive of the Environmental Protection Agency (EPA) to claw back funding commitments in grants of billions of dollars for nonprofits to distribute for renewable energy and energy-efficiency projects, including the $7 billion Solar For All program.
Five organizations, led by the Climate United umbrella of nonprofit groups, are battling to tap their prior grant awards under a 2022 Inflation Reduction Act program to spur clean-energy projects, including solar installations. Their plaintiffs’ awards total nearly $17 billion.
Prospects for the organizations and their projects both hang in the balance, even deteriorate with time under the weight of judicial uncertainty, as they decipher the latest court decision and plot their next moves.
The EPA began freezing and blocking federal Green Bank grants shortly after the second Trump administration took office in late January.
Decided on a 2-1 vote, majority and dissenting opinions of the U.S. Court of Appeals for the District of Columbia Circuit explore how rights and responsibilities are distributed among the three branches of government – executive, legislative and judicial. Among them are:
- How much authority does a federal agency possess in dismantling a legislative policy and program that it opposes and criticizes?
- Can it act against the program without litigating evidence to prove concerns about the program’s administration, or can it take action on its own?
- Which courts can lawfully take jurisdiction over such a dispute – a U.S. district court, or a court for handling claims of damages from the federal government?
A U.S. District Court ruling had blocked the EPA’s moves pending appeal. The appeal overturns that decision and instead backs the EPA’s curtailment of the Green Bank.
Two Trump administration appointees from his first term sided with the EPA. An appointee of President Obama dissented. Their opinions take up 92 pages.
In reaction, Beth Bafford, chief executive officer of Climate United, which has ministered over a Green Bank grant portfolio of nearly $7 billion, was quoted in a release as saying the decision disappointed but did not surprise the organization.
Bafford is quoted as saying her organization stood firm on its position: “EPA unlawfully froze and terminated funds that were legally obligated and disbursed.”
“This is not the end of our road,” Bafford said in a quote.
The majority-opinion judges, Gregory G. Katsas and Neomi Rao, said the district court had acted without judicial authority in enjoining the EPA freeze on Green Bank grants and asserted instead that the U.S. Court of Federal Claims should adjudicate any claims about unfunded awards.
The opinion suggested that U.S. case law affords latitude to administrative-branch officials to halt spending allocated by congressional action where it finds that the program’s administration is problematic.
A strongly stated dissenting opinion by Cornelia T.L. Pillard noted the EPA has undermined the Green Bank program by putting it on hold for six months, forcing defaults on loan promises and blocking housing and energy projects to realize congressional vision. “EPA has done all that without presenting to any court any credible evidence or coherent reason that could justify its interference with Plaintiffs’ money and its sabotage of Congress’ law,” Pillard wrote.
It’s not yet clear what nonprofit plaintiffs in the case will do next. Meantime, many of the nonprofits, such as rewiring America, are rededicating themselves to their organizational aims while trimming their budgets and cutting staff.
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