DOE Funding Cuts Hit 223 Blue State Energy Projects

The cancellations worth $7.56 billion sparked outrage among Democrats, who called them illegal and said they would raise electricity costs.

The Department of Energy said late Wednesday it is terminating 321 financial awards worth approximately $7.56 billion as the result of a review led by Energy Secretary Chris Wright.

In a statement, DOE said the awards support 223 projects in its grid, renewable and fossil offices, as well as in the Office of Clean Energy Demonstrations, Advanced Research Projects Agency-Energy, and Manufacturing and Energy Supply Chains office.

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DOE did not immediately provide a list of affected projects but said roughly a quarter of the awards were distributed between President Donald Trump’s reelection and inauguration day.

"President Trump promised to protect taxpayer dollars and expand America's supply of affordable, reliable, and secure energy. Today's cancellations deliver on that commitment," Wright said in a statement.

One of the canceled awards is for the ARCHES hydrogen hub in California, according to a letter to grant recipients from the Office of Clean Energy Demonstrations viewed by POLITICO E&E News. The letter directed ARCHES officials to cease all project activities after Oct. 1. "Effective immediately, you may not incur any new project costs and shall cancel as many outstanding obligations as possible," the letter said.

In a statement, ARCHES CEO Angelina Galiteva said the decision "ignores the critical benefits our projects will deliver" but said projects would continue with help from state leaders and the private sector.

Bloomberg News said Tuesday the scrapped funding covers renewable projects and another hydrogen hub in the Pacific Northwest, according to an unnamed administration official. Pacific Northwest hub did not respond to request for comment Tuesday, but like ARCHES, it is a backer of wind and solar energy.

The two hubs were expected to receive up to $2.2 billion from the federal government as part of a nationwide network to demonstrate the transport and production of clean fuel. They were the first two hubs to ink a financial deal with the Biden administration last year.

There are five other hydrogen hubs slated to receive funding under the 2021 bipartisan infrastructure law, including multiple projects that would demonstrate blue hydrogen using natural gas tied to carbon capture. Overall, the infrastructure law provided roughly $7 billion for the hubs. DOE did not respond to a request for comment about the canceled projects.

In the Wednesday evening statement, the department said award recipients would have 30 days to appeal a termination decision. Some projects already have appealed cancellations, it said.

In May, Wright released a memo outlining the process for a department-wide review, saying among other things that projects needed to be financially viable and aligned with administration priorities.  Last week, Wright announced that $13 billion for clean energy projects was being returned to the Treasury Department, although those were unobligated funds called for the in the One Big Beautiful Bill Act.

The new project cancellations were anticipated after White House budget chief Russ Vought said on social media Wednesday that the administration would cancel nearly $8 billion in energy projects in 16 states that backed former President Joe Biden in the November election.

“Nearly $8 billion in Green New Scam funding to fuel the Left’s climate agenda is being cancelled. More info to come from @ENERGY,” Vought wrote on X.

“The projects are in the following states: CA, CO, CT, DE, HI, IL, MD, MA, MN, NH, NJ, NM, NY, OR, VT, WA,” he said.

The comments sparked outrage Wednesday from Democrats, who said the cancellations are illegal and would raise electricity costs.

“This administration has had plans in the works for months to cancel critical energy projects, and now, they are illegally taking action to kill jobs and raise people’s energy bills. This is a blatant attempt to punish the political opposition, but this won’t just hurt Democrats–it’ll hurt regular people just trying to get by, in red districts and blue districts alike,” said Sen. Patty Murray (D-Wash.), vice chair of the Senate Appropriations Committee.

In an emailed statement, Sen. Alex Padilla (D-Calif.), a supporter of ARCHES, said pulling funding for the hydrogen hub is “vindictive, shortsighted, and proof this administration is not serious about American energy dominance.”

Sen. Tina Smith (D-Minn.) also told POLITICO that it’s “so stupid” to retaliate against Democrats when the result would be increased energy bills for all Minnesotans.

Some Republicans, however, urged the administration to make deeper cuts on clean energy.

Rep. Troy Nehls (R-Texas) wrote “terrific news. Terminate the Green New SCAM,” in a post on X in response to Vought’s post.