Energy Department rescinds $7.5 billion for projects in 16 Democratic states

 The Trump administration rescinded funding for more than 230 energy projects approved under former President Joe Biden. The Department of Energy (DOE) said the cancellations will save taxpayers $7.5 billion, and it had determined that the projects "did not meet the economic, national security or energy security standards." 

In a press release, Energy Secretary Chris Wright said the projects were "rushed through" by the Biden administration. He added that the cancellation follows through on President Donald Trump's promise to "protect taxpayer dollars and expand America's supply of affordable, reliable and secure energy."

The announcement comes as the federal government entered a shutdown after Democrats and Republicans in Congress could not come to an agreement on budget priorities.

In a social media post preceding the official DOE announcement, Office of Management and Budget director Russell Vought said the cancellation will affect projects in 16 Democrat-run states. Those states are California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maryland, Massachusetts, Minnesota, New Hampshire, New Jersey, New Mexico, New York, Oregon, Vermont and Washington.

The DOE did not release a list of specific projects that will lose out on funding. The department said the action will end 321 financial awards, affecting 233 projects. About a quarter of those awards - equating to $3.1 billion - were approved between Election Day and Inauguration Day, the DOE said. 

The cancellations mark the latest step to undo investments into renewable energy sources such as wind and solar as the Trump administration shifts focus to oil, gas, coal and nuclear power. In recent months, the federal government has taken actions to restrict offshore wind development, slash regulations on power plant emissions and eliminate subsidies for electric vehicles' renewable energy and efficiency programs. 

How are impacted states reacting? 

A $1.2 billion grant to develop a hydrogen fuel supply chain in California is among the funding the DOE rescinded. The funding was awarded to the Alliance for Renewable Clean Hydrogen Energy Systems to create an "ecosystem" for hydrogen fuel, which is an emissions-free alternative that can power heavy vehicles, industrial processes and potentially work for large-scale power generation or as jet fuel. 

In a statement, California Gov. Gavin Newsom said the DOE's action defies common sense but vowed to "continue to pursue an all-of-the above clean energy strategy that powers our future and cleans the air, no matter what D.C. tries to dictate." 

The California hydrogen hub garnered $10 billion in private funding with more than 400 partner organizations, according to Newsom's office. 

Sen. Patty Murray, D-Wash., called the action a "blatant attempt to punish the political opposition" amid the government shutdown. Murray accused the administration of "illegally taking action to kill jobs and raise people's energy bills." 

What happens next?

It's unclear if the funding cancellation will impact electricity prices. As utility rates across the country increase, electric affordability is becoming an increasingly potent political issue. 

Supporters of renewable energy say it provides cheap energy to the grid, and warn that cancelling projects will push up prices by dampening the amount of electricity available. Critics, however, say wind and solar rely on gas power as a back up and point to decades of subsidies that they say hide the true cost of renewables. 

The DOE announcement said grant recipients have 30 days to appeal the decision to terminate funds. The department noted that some impacted projects have already begun that process.

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