Members concerned about conflicts of interest; risk of waste, fraud, and abuse; and an increased reliance on China

Washington, D.C. — House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA), Subcommittee on Oversight and Investigations Chair Morgan Griffith (R-VA), and Subcommittee on Environment, Manufacturing, & Critical Materials Chair Bill Johnson (R-OH), on behalf of the Oversight and Environment subcommittees’ Republicans, wrote to Environmental Protection Agency Administrator Michael Regan.

The letter outlines the following concerns with the Greenhouse Gas Reduction Fund (GGRF), established by the so-called “Inflation Reduction Act”: 

• Possible conflicts of interest with funding recipients 
• Speed at which $27 billion in grants must be awarded opens door to waste, fraud, and abuse 
• Challenges to program implementation given China’s control over solar market 

The letter requests answers to the following questions by November 1, 2023. 

1. Possible Conflicts of Interest with Fund Recipients 

KEY FACTS: 

• Earlier this year, the EPA released its plan for implementing the GGRF, which includes three competitions through which it plans to administer $27 billion in grant funding: 
• A $14 billion National Clean Investment Fund (NCIF) competition will fund two to three national non-profits that would partner with private capital providers to deliver financing to businesses, communities, community lenders, and others for clean energy projects. 
• A $6 billion Clean Communities Investment Accelerator (CCIA) competition will fund two to seven non-profits that will build financing capacity across specific networks of community lenders for clean technology projects. 
• A $7 billion Solar for All (SFA) competition aims to expand access to residential solar investment among low-income and disadvantaged communities. 
• The GGRF program is a completely new undertaking for the EPA, according to the agency’s inspector general, and includes provisions associated with entities often referred to as “green banks.” 
• According to the EPA, the program will “leverage public investment with private capital” to finance clean energy projects, despite the agency having no experience administering such a funding vehicle, referring to it as “a first-of-its-kind” program. 

KEY EXCERPT: 

“[…] [S]ome have flagged that the EPA could use this program to subsidize favored special interest organizations. Others have alleged that current EPA appointees have ties to potential recipients of these sizeable awards, raising ethical concerns.” 

READ: 

AEI: Response to Request for Information from the Environmental Protection Agency: Greenhouse Gas Reduction Fund 

Protect the Public’s Trust: Greendoggle? EPA Privately Discussed How to Spend $20B With a Few Favorite Environmental Groups 

2. Speed at Which $27 Billion in Grants Must be Awarded Opens Door to Waste, Fraud, and Abuse 

KEY FACTS: 

• The SFA notice of funding opportunity (NOFO) was announced in June 2023, with an application deadline of October 12, 2023. 
• According to the NOFO, the EPA anticipates notifying selectees in March 2024 and making awards in July 2024. 
• The EPA released NOFOs for the $14 billion CCIA and the $6 billion NCIF on July 14, 2023, with applications closing on October 12, 2023. 
• For these competitions, the EPA anticipates notifying selectees in March 2024 and plans for them to start administering the funds by July 2024. 
• The EPA has a statutory deadline to obligate funds by September 2024. 
• Under this timeline, the EPA has just over a year to obligate $27 billion. 

KEY EXCERPT: 

“The GGRF implicates many oversight concerns. For example, the EPA’s Inspector General recently testified before the Committee’s Subcommittee on Oversight and Investigations that newly created programs providing funding to new recipients on short timelines possess an increased vulnerability to fraud and execution errors.” 

READ:  

EPA IG’s Testimony at E&C OI Hearing Titled “Follow the Money: Oversight of President Biden’s Massive Spending Spree” 

3. China’s Control over Solar Market Presents Challenges to Implementation 

KEY FACTS: 

• China’s control of key materials in renewable energy extends “across the board.” 
• China controls almost half of the U.S. solar panel market share, making it incredibly difficult to supplant Chinese producers with domestic suppliers.  
• Certain projects under all three competitions are subject to the Buy America domestic sourcing requirements of the Build America, Buy America (BABA) provisions of the Infrastructure Investment and Jobs Act (IIJA).  
• The EPA also claims it will provide future guidance on which projects are subject to the BABA requirements. 

KEY EXCERPT: 

“If there will be domestic sourcing requirements through BABA on the various GGRF programs—and we know that China has a significant stranglehold on the availability of solar panels, among other green energy technologies—we are unsure how the EPA and program participants will ensure that the GGRF programs are not supporting Chinese products.” 

CLICK HERE to read the letter.