The Energy Department is planning to prop up old and shuttered coal plants using more than half a billion dollars that Congress originally set aside to advance carbon capture technologies and improve energy resiliency and environmental protection in rural areas.
It’s a move that former and current agency officials, legal experts and some lawmakers and appropriators say undermines congressional intent in the 2021 bipartisan infrastructure law. That statute authorized and appropriated almost $3 billion to capture heat-trapping gases from big emitters through demonstration and pilot programs.
“DOE has zero authority to repurpose the funds without going through Congress,” said one career staffer, granted anonymity because they were not authorized to speak to the press. “DOE leadership is doing something with those CCUS funds that is obviously counter to the [bipartisan infrastructure law].”
DOE’s about-face is laid out in a recent notice of funding that provides $525 million to build, restart, overhaul or retrofit coal-fired plants that are shuttered or scheduled to retire before 2032. In the notice, the agency states that the funding being offered up is unobligated money that lawmakers originally set aside under the bipartisan infrastructure law for the now-defunct Office of Clean Energy Demonstrations, or OCED.
Congress directed the office, which was dissolved during a recent reorganization, to use the money for carbon capture demonstration and large-scale pilot projects, and energy improvements and environmental protection in rural or remote areas.
While DOE instructed applicants to “integrate carbon capture demonstration phases,” current and former department staffers say the notice is vague, doesn’t describe in detail when to incorporate CCUS, and allows applicants to move ahead with near-term “reliability upgrades” without requiring carbon capture at the outset.
DOE insists it’s on solid legal footing.
The department issued the funding opportunity under “its existing authorities” to support coal commissioning, recommissioning, retrofitting and modernization projects, as well as rural capacity and energy affordability coal projects, said Ben Dietderich, the agency’s press secretary and chief spokesperson, in an email.
“These investments are intended to keep critical coal plants operating, strengthen grid reliability, and deliver affordable secure energy for the American people,” said Dietderich. “The [notice of funding opportunity] uses previously appropriated funding within DOE programs and is structured consistent with the Department’s statutory authorities and long-standing funding practices.”
But Don Kettl, professor emeritus and former dean of the University of Maryland School of Public Policy, said the Trump administration seems to have found a way to skate around the requirements of the law using “clever lawyering” in such a way that makes it hard for the public and Congress to grasp. DOE, he said, used language in the notice of funding that’s so vague it essentially scraps the requirement for carbon capture and shows the agency is prepared to accept even “pledges” that are virtually unenforceable given the lack of detail.
“This is yet one more example of the Trump administration’s claim of reorganization and reprogramming authority, pushing aside existing law and practice and precedent,” said Kettl.
‘Slippery business’
DOE’s repurposing of money sets a troubling precedent that challenges the balance of power between the executive and congressional branches of government, and risks locking in decades of greenhouse gas emissions from newly built or recommissioned coal plants, said Danielle Lemmon, a climate and energy consultant and former DOE employee.
Congress set aside the money in the bipartisan infrastructure law to support clean energy, not to prop up coal, said Lemmon, who worked at OCED on portfolio analysis tools used to inform federal funding decisions before leaving in the department in 2024.
DOE, she said, is invoking Trump’s executive order declaring a “national energy emergency” to justify phasing the funding in a way that defers meaningful carbon capture requirements, and creates a loophole to spend CCUS-authorized funds without a clear obligation to actually deploy carbon capture.
“While CCUS is technically required in applications, the notice rarely mentions CCUS, and never mentions the words ‘carbon capture’ in its technical review criteria — the rubric DOE uses to evaluate and select projects,” Lemmon said.
The notice doesn’t say how developed the carbon capture technology needs to be or what CCUS-related ‘demonstration outcomes’ a project is supposed to prove, she said. For example, it does not say whether a project should lower the cost of capturing carbon, said Lemmon. And federal grant recipients, she said, are not obligated to continue into later phases of the award and can structure projects so the carbon capture phase comes at the very end — then opt out before reaching it, with no penalty.
“It seems like a way to get around Congress with a wink and a pinky promise between the DOE and the applicant, that, yeah, include CCUS in the application now, but you won’t have to actually build it,” she said.
DOE is also using a second tranche of funding — $175 million — to support coal projects under a rural and remote energy provision in the bipartisan infrastructure law intended to bolster both resilience and environmental protection from the adverse impacts of energy generation, Lemmon said. While coal projects may align with the resilience goal, she said, they directly conflict with the provision’s co-equal emphasis on environmental protection.
DOE in an email said the language of the notice of funding was meant to provide flexibility with respect to project phasing, and all projects “must complete applicable coal fired power plant construction, modernization or upgrades as well as a CCUS pilot or demonstration” within the “proposed project period of performance,” which is six years.
The department also said the notice of funding is compliant with the section of the bipartisan infrastructure law that established the CCS funding.
But Kettl of the University of Maryland School of Public Policy said it’s one thing to say that carbon recapture plans are required and that applicants will be required to meet them, but it’s another thing to say what kind of plans will be approved and how aggressively the agency will enforce them.
“It’s a slippery business,” he said. “They’re prepared to wink at almost anything, it seems, that applicants will put forward. The question is [whether you] can put targets in there that are so vague as to be virtually unenforceable.”
The statute clearly limits the funds appropriated to the Carbon Utilization Program, Lewis & Clark Law School professor William Funk said in an email. “To spend this money on something else would be unlawful,” said Funk.
‘Clever enough’
Internal DOE documents also reveal the agency’s justification for moving around funds, as well as an acknowledgment that the move is likely to be contentious on Capitol Hill.
Deputy Secretary James Danly, in a Sept. 30 memo obtained by POLITICO’s E&E News, said the U.S. grid faces “an urgent reliability crisis” as coal plants close. President Donald Trump’s declaration of an energy emergency coupled reports from grid overseers, said Danly, allow the agency to shift spending.
“DOE has clear statutory authority and available OCED funds, specifically the carbon capture programs and the energy improvements in rural and remote areas program, that can be leveraged to support this need,” wrote Danly. “Directing these funds to coal recommissioning and retrofit projects would immediately strengthen grid reliability and advance national security priorities.”
The memo later states: “SENSITIVITIES: Use of funds appropriated for ‘clean energy’ purposes to support coal related activities may generate some Congressional interest (e.g., Congressional inquiries, letters, or discussion during hearings, etc.).”
Republican Sen. John Kennedy of Louisiana, who chairs the Senate Appropriations Subcommittee on Energy and Water Development, didn’t immediately respond when asked for comment. But Sen. Patty Murray of Washington, the subcommittee’s top Democrat, criticized the move as undermining federal statute.
“On an overwhelming bipartisan basis, Congress passed a law to fund carbon capture technology, but instead of carrying out the law as intended, the Trump administration is once again engaging in legal gymnastics to instead use that funding to prop up coal plants and line the pockets of big coal CEOs,” Murray said in a statement. “It’s our kids and our communities who will suffer as environmental progress is unraveled. Republicans should join us in insisting that this policy is reversed and the law is implemented as Congress intended.”
House Energy and Commerce ranking member Frank Pallone (D-N.J.) likewise blasted the move.
“Corporate welfare is alive and well under the Trump Administration,” Pallone said in a statement. “Trump and his cronies at DOE are freely handing out taxpayer dollars to their fossil fuel buddies just so they can keep lining their pockets with working families’ money. Forcing just one of these plants to stay online already cost Midwestern families $29 million for only five weeks — imagine the damage it will do to force even more of these old, dilapidated plants to stay open.”
Kettl said that while there’s a case to be made that DOE is misappropriating the money, it’s an argument that’s not likely to succeed in court or the halls of Congress.
“Is it legal? They would claim so. Would the courts reverse the decision? That would depend first on finding a plaintiff who could establish standing, and that’s very hard in this case, and the administration’s strategy could well prove clever enough to sidestep a court challenge,” said Kettl.
“Congress, of course, could reverse the decision, but that step is unlikely given Republican control of both houses — and of their committees,” he added.
