Federal watchdog investigating energy investments selectively terminated by Trump Administration in October
WASHINGTON D.C. (KEYT) – On Wednesday, members of the California congressional delegation announced that a federal watchdog has agreed to investigate billions in federal energy investments selectively terminated by the Trump Administration earlier this year.
"[T]he Office of Inspector General recently announced an audit which will review the Department of Energy’s processes when cancelling financial assistance and whether those cancellations were in accordance with established criteria," read a letter from Sarah Nelson with the U.S. Department of Energy. "This work will help ensure that these activities are conducted consistently with applicable laws, regulations, and Departmental policies and procedures."
The $7.6 billion in grants were authorized through the Infrastructure Investment and Jobs Act which was signed into law in 2021.
"Donald Trump and his administration have launched an unlawful campaign of vengeance toward California, and their illegal cancellation of 79 energy grants to California was the latest example," said Senator Adam Schiff, one of 30 members of Congress who requested the restoration of funding in October. "I’m pleased to see that at our request, the Energy Department’s acting Inspector General is opening an investigation into this clear political targeting, which the Trump administration has openly admitted in court was intended to punish blue states."
In May of this year, Secretary Wright issued a Secretarial Memorandum that required all financial awards through the federal agency to be reviewed on a case-by-case basis to, "identify waste, safeguard taxpayer dollars, protect America's national security, and advance President Trump's commitment to deliver affordable, reliable, and secure energy for the American people."
"On day one, the Energy Department began the critical task of reviewing billions of dollars in financial awards, many rushed through in the final months of the Biden administration with inadequate documentation by any reasonable business standard," Secretary of Energy Chris Wright argued regarding the terminated funding. "President Trump promised to protect taxpayer dollars and expand America’s supply of affordable, reliable, and secure energy. Today’s cancellation’s deliver on that commitment."
On Oct. 1, the Trump Administration's Budget Director, Russell Vought announced on X/Twitter that Department of Energy projects in California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maryland, Massachusetts, Minnesota, New Hampshire, New York, Oregon, Vermont, and Washington would be terminated.
Nearly $8 billion in Green New Scam funding to fuel the Left's climate agenda is being cancelled. More info to come from @ENERGY.
— Russ Vought (@russvought) October 1, 2025
The projects are in the following states: CA, CO, CT, DE, HI, IL, MD, MA, MN, NH, NJ, NM, NY, OR, VT, WA
Each one of the states slated for federal energy investment cuts awarded their respective electoral votes to Kamala Harris in the 2024 Presidential Election.
On Oct. 3, California's Senators specifically noted the terminations included California's Alliance for Renewable Clean Hydrogen Energy (ARCHES) Hydrogen Hub, a $1.2 billion public-private hydrogen hub project, funded by bipartisan infrastructure legislation passed during the Biden Administration.
The project intended to use the $1.2 billion in federal funding to bring together more than 300 organizations across California representing state, county, and city governments; industry groups; community-focused organizations; universities; labor unions; non-governmental entities; and national labs detailed Senator Alex Padilla in 2023 when the project was selected.
"This cancellation forgoes an agreement that garnered over $10 billion in primarily private sector cost share, threatens over 200,000 new family-sustaining jobs and undermines a program slated to save nearly $3 billion in health costs per year," noted Governor Gavin Newsom after the announced terminations in October.
Democrats on the House Appropriations Committee compiled a list of 223 projects nationwide slated for termination by the Department of Energy including funding for California's ARCHES hydrogen hub project and the Pacific Northwest Hydrogen Hub, a project that was scheduled to receive $1 billion in federal funding.
California's ARCHES hydrogen hub network of public and private groups included the Central Coast Clean Cities Coalition and The Hydrogen Delivery Company, both located in Santa Barbara, and two other local projects cited for termination -$2 million for the Community Environmental Council and $8,796,815 for Smartville Inc.- were included in the announced cuts identified by members of the House Appropriations Committee.
The project was expected to create a functioning hydrogen market by 2030 as part of California's roadmap to carbon neutrality by 2045 which included a 1,700-fold increase in the use of hydrogen as a fuel source across multiple sectors.
"For California to meet its goal of net zero emissions by 2045, it must decarbonize its transportation sector, which accounts for 50% of the state’s carbon emissions," explained a Master's group project at UC Santa Barbara's Bren School of Environmental Science & Management in 2024. "However, current electric vehicle batteries are not equipped to suit the needs of larger vehicles, like freight trucks or buses. Green hydrogen, or hydrogen made from renewable electricity and water, can fill this gap. However, green hydrogen is currently produced in lesser quantities than carbon-intensive fuels, such as diesel, making green hydrogen an unaffordable fuel option."
California congressional members noted in October that a total of 79 projects across California were included in planned terminations including:
- $30 million to build long-term energy storage systems for Valley Children's Hospital that serves 1.3 million children in the Central Valley region
- $13 million for Liberty Utilities' Leapfrog program to improve energy reliability with an emphasis on rural communities
- $500 million for the National Cement Company as part of the Lebec Net-Zero Project that was part of efforts to reduce and capture emissions created by the cement industry
- $75 million for the Gallos Glass Project in Modesto that aimed to decarbonize the glass industry
"The Trump Administration’s unlawful cuts of billions of dollars for California energy projects — including over $2 billion in Republican-represented districts — is making Donald Trump’s affordability crisis even worse," argued Senator Alex Padilla. "After our calls for a watchdog investigation, I am glad to see the Energy Department’s inspector general taking action to bring transparency and accountability for the Administration’s vengeful hit list. From a backup power generator for a California children’s hospital to bipartisan funding for ARCHES Hydrogen Hub, the Administration must reverse these harmful cuts and work to prevent Americans’ energy costs from skyrocketing even further."
