Media Coverage
Source: Law360, Utility Dive
Media Coverage
Press Contacts: Erik Cummins, Matt Hyams, Taina Rosa, Olivia Thomas
02.06.25
With the status of federal grants and loans provided by the Inflation Reduction Act and Infrastructure Investment and Jobs Act in doubt under the Trump Administration, energy companies that have made financial commitments based on obligated government funds should be in a stronger position to demand their counterparties fulfill their side of the deal, according to Jeffrey Merrifield, the co-leader of Pillsbury’s Energy Transition practice.
“In the case of provisional [grant or loan commitments] ...it’s harder to make that type of claim,” Merrifield said. “You’d have to think long and hard about making any financial commitments based on that provisional application.”
Merrifield also noted in an interview with Utility Dive that, in light of a December report from the Department of Energy Inspector General’s office, the freeze gives the new administration time to audit Loan Programs Office (LPO) commitments.
“There’s a good reason to suspect that folks coming in on the transition team saw that report and had questions about the validity of [LPO disbursements],” he said. “Lots of Republicans are raising questions about the possibility of a ‘Solyndra 2,’ and so they want to do a deeper dive and vet those projects,” he added, referring to the California solar startup that filed for bankruptcy after securing $535 million from the LPO during the Obama administration.
Merrifield said the spending freeze may initially impact some energy sources favored by the Trump administration, such as nuclear and geothermal, but will likely focus on industries like wind, solar, batteries and electric vehicles in the long-term. He also mentioned that the administration is also likely to prioritize reviewing conditional commitments—especially those made after the election—over finalized ones.
Nonetheless, funding for generation and transmission projects could continue due to the recognition that these investments are necessary for system reliability amid rising energy demands, he concluded.