Bryson City Methodist Church signed its loan papers just in time. The small Western North Carolina congregation is getting $50,000 worth of solar panels installed this month, thanks in part to a low-interest loan from Mountain BizWorks funded by the federal Greenhouse Gas Reduction Fund.
Three days after the church secured its funding, the Environmental Protection Agency (EPA) froze $20 billion in climate and clean energy grants, putting energy efficiency and resiliency projects in limbo across the country.
What happens to that money is now up to the courts after a federal judge temporarily blocked the EPA’s attempt to claw back $14 billion of money awarded in 2024 by the Biden administration’s EPA.
“Everybody was pretty cognizant that this could happen, so that’s why we wanted to move as fast as we could, raising the money and then getting the loan,” says Catherine Gantt, church council president at Bryson City Methodist. They moved just fast enough.
The church signed papers to borrow about $38,000 from Mountain BizWorks on Feb. 14, says Al Painter, chairman of the church’s board of trustees. The rest came from fundraising. On Feb. 17, the FBI sent a letter to CitiBank, which holds the funds for the federal government, ordering it to freeze the accounts of 28 organizations, including Mountain BizCapital, Mountain BizWorks’ legal name.
The FBI letter alleged that the listed organizations were involved in “conspiracy to defraud the United States” and “wire fraud.” Recipients of the funds dispute those allegations and say the freeze stalls well-vetted projects that will help local organizations save energy and improve resiliency, especially after Tropical Storm Helene knocked out power for weeks in some places.
Denise Cheung, senior prosecutor and head of the criminal division in the U.S. Attorney’s Office in Washington, resigned Feb. 18 and issued a letter saying Trump administration officials pressured her to launch a criminal investigation without sufficient evidence, according to Politico. Interim U.S. Attorney Ed Martin demanded her resignation after she refused to order the bank to freeze the funds, she said in a letter obtained by Politico.
One recipient of the funds, Climate United, sued CitiBank and the EPA on March 8 over the funds promised to them. On March 19, U.S. District Judge Tanya S. Chutkan issued a restraining order, blocking the EPA from taking the money back from CitiBank, but she didn’t require the bank to release the funds to the awardees, according to The New York Times.
Chutkan ruled that the EPA had not offered “credible evidence” in support of its efforts to block the grants, nor had it followed proper procedures in canceling them, according to The New York Times.
Mountain BizWorks declined to comment for this story but verified that its funds were frozen, affecting the Electrify Fund.
According to Mountain BizWorks’ website, the fund, which was formed in February to manage the Greenhouse Gas Reduction Fund money, is available for solar energy and storage projects, energy-efficient buildings, electric vehicles and equipment and capital for clean energy businesses.
“Through providing very affordable and patient financing, the Electrify Fund will help more clean energy projects become cost-effective from day one. We are encouraged this will be a timely regional recovery resource as well, as so many of our rebuilding needs will include energy efficiency and energy resilience improvements,” Matt Raker, Mountain BizWorks executive director, wrote in a release posted Feb. 26 announcing the fund.
Building resilience
In another instance, the N.C. Clean Energy Fund, a nonprofit clean energy lender based in Durham, had about $51 million worth of projects that it intended to finance using funds now frozen by the EPA.
The frozen funds come from the 2022 Inflation Reduction Act, which authorized the EPA to create the Greenhouse Gas Reduction Fund, a $27 billion investment to reduce greenhouse gas emissions and air pollution in communities across the country by mobilizing private capital, particularly in low-income and disadvantaged communities. Of that, $20 billion could leverage 12 times that amount using specialized “green bank” financing, according to multinational business consulting firm McKinsey & Co.
All $20 billion was committed to various community financiers in 2024.
N.C. Clean Energy Fund’s planned projects include providing solar loans for individuals, a solar project serving a municipal water treatment plant, capital for energy efficiency services companies to expand and energy efficiency improvements for a small rural college, says co-director Melissa Malkin-Weber. The projects are for communities across the state, including in WNC.
The nonprofit also hopes to finance microgrid and solar battery and storage projects at community hubs that would help WNC become more resilient after a natural disaster, says Asheville-based Michelle Myers, program manager for the clean energy fund.
While there is already some state funding available to increase resiliency at first-responder hubs like fire stations, Myers’ group hopes to fund energy resilience measures at “second-responder” stations.
“It’s not the firehouse, but it’s the place people went [immediately after Tropical Storm Helene] — like I went to Westwood Baptist Church to get water — that could have been a place where we could have had phones plugged in or been able to contact loved ones had we had better infrastructure in place.”
That’s where the Greenhouse Gas Reduction Fund could come in.
“The landscape and the opportunity to really make significant improvements in Western North Carolina to build our resiliency, to build storage and battery projects where we know we’re going to need them, is there. The green bank could be a partner if we had the capital to do so,” Myers says.
Yet another entity, the Green Bank for Rural America, a subsidiary of Appalachian Community Capital (ACC), formed in 2024 to distribute $500,000 it was awarded from the now imperiled fund. The Green Bank, one of eight recipients of $20 billion, has received $300,000 in requests from community lenders for climate-related projects, including Mountain BizWorks, Green Bank acting communications director Emma Pepper tells Xpress in an email.
“A significant portion of these funding requests came from lenders working to rebuild infrastructure, businesses and local economies in the wake of Hurricane Helene’s devastating impact in 2024,” says Donna Gambrell, president and CEO of Appalachian Community Capital, and Daniel Wallace, president and CEO of Green Bank, in a joint statement about the freeze.
“We disagree with the EPA’s move to terminate this grant,” they write.
‘Nothing to find’
EPA Administrator Lee Zeldin, an appointee of President Donald Trump, on Feb. 13 demanded that the funds be returned to the U.S. Treasury “for proper oversight.” Zeldin claims the programs were “rushed” and are rife with waste and fraud.
Malkin-Weber disagrees.
“This is not money that got rushed out the door,” she says. “Everybody knew that a public investment like this had to be very robust, it had to follow all the guidelines because it’s such a big investment.”
The EPA’s own website details a process that began with a request for information from stakeholders’ issues in October 2022. There were multiple steps, including expert review and public listening sessions before the application window opened in the summer of 2023, launching a “rigorous, multistage review and selection process,” according to the EPA’s background on the fund. The fund was fully obligated to awardees in August 2024.
In order to claw back funds that were already awarded, the EPA would have to prove there was “waste, fraud or abuse” in the program, which it did not sufficiently do, according to Judge Chutkan.
In addition to giving “no legal justification” for canceling the contracts, she wrote in her restraining order that the administration had only “vaguely” outlined its allegations that the grant program was marked by waste and potential conflicts of interest, as reported by Politico.
The N.C. Clean Energy Fund is operating as if the funds are just temporarily restrained and will become fully available soon.
“I’m confident that there isn’t any evidence of waste, fraud and abuse,” Malkin-Weber says. “Once the dust settles and those funds are unfrozen, then we have projects that we can start implementing very quickly.”
‘We’re very excited’
In WNC, work on the project at the Bryson City United Methodist Church has begun.
“One of the things in our faith is that we’re supposed to be taking care of the Earth, not hurting it,” Gantt notes.
A church committee exploring ways to make the property “more responsive to being a good steward of the Earth” came up with the idea for solar panels and contacted Sugar Hollow Solar.
While Gantt says the church probably would have found other funding for the project if they didn’t close the deal before the EPA froze the funds, it would have cost the church more and taken longer to pay off, thus delaying the financial benefits of installing the solar.
Gantt says she feels bad for any projects that might not get funded now because of the freeze.
“We’re very committed to the project,” she says. “For the benefits for the Earth, for looking out for our great grandchildren, where they don’t have to worry as much about energy costs in the future; that’s all really important to us.”
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