Judge orders release of $14 billion in green energy grants as EPA seeks appeal

(CN) — A federal judge temporarily stopped the Environmental Protection Agency from withholding at least $14 billion in clean energy grants approved under former President Joe Biden.

In an order late Tuesday, U.S. District Judge Tanya S. Chutkan prevented the agency and other federal officials from halting grants to three recipients: Climate United Fund, Coalition for Green Capital and Power Forward Communities.

The money could be dispersed as early as Thursday afternoon, the judge wrote, but the agency quickly filed a notice seeking to appeal the decision.

Chutkan, a Barack Obama appointee, wrote that a memorandum opinion was forthcoming.

Beth Bafford, CEO of Climate United Fund, said in a statement Tuesday the organization was ready to get back to work.

“Today’s decision gives us a chance to breathe after the EPA unlawfully — and without due process — terminated our awards and blocked access to funds that were appropriated by Congress and legally obligated,” Bafford said. “After a year-long application process, we were hired to do a job that we’ve done for decades: investing in communities and strengthening markets.”

The order represented another blow to President Donald Trump’s efforts to roll back Biden’s signature climate law, the Greenhouse Gas Reduction Fund. The $27 billion green bank was created under the 2022 Inflation Reduction to jump-start domestic clean energy and climate projects, including energy efficient homes, electric vehicle infrastructure and solar paneling.

While favored by congressional Democrats, Republicans denounced the green bank as an unaccountable “slush fund.’’ EPA Administrator Lee Zeldin announced in February the agency would freeze assets intended for the still-emerging program, claiming it was rife with fraud.

Climate United Fund sued the EPA, its administrator and Citibank in the D.C. District Court, accusing environmental officials of illegally strong-arming the bank into withholding money it was entitled to access.

“Without those grant funds, Climate United will shortly run out of cash to pay operating expenses — it will no longer be able to pay its employees, pay rent, pay critical service providers and contractors, or meet its commitments under the loans and awards it has already approved,” the organization wrote.

Chutkan issued a temporary restraining order in March blocking the EPA from canceling the clean energy grants, finding the agency likely violated the law by issuing identical termination letters to the grant recipients.

In a separate decision Tuesday, U.S. District Judge Mary McElroy ordered several government agencies, including the EPA, to release green bank grants to six other organizations. McElroy, a Trump appointee, said she wanted to be “crystal clear” that the president was “entitled to enact his agenda,” but acknowledged the groups had shown the funding freeze was “arbitrary and capricious.”

“Agencies do not have unlimited authority to further a President’s agenda, nor do they have unfettered power to hamstring in perpetuity two statutes passed by Congress during the previous administration,” McElroy wrote.

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