Shapiro Sues Trump Administration Over Federal Funding Freeze

February 16, 2025

Last week, Governor Shapiro sued the Trump administration over its broad freeze of federal funding allocated for state programs. Most of the funding defined within the lawsuit is connected to the signature laws passed under the Biden Administration including the 2022 Inflation Reduction Act (IRA) and the 2021 Infrastructure Investment and Jobs Act (IIJA). Both the IRA and IIJA appropriate federal dollars for individual states to implement environmental and energy policy objectives.

The Trump administration issued a memo in late January freezing federal grants and loans, saying it was necessary to review whether spending aligned with Trump’s executive orders on various issues such as climate change. Two federal judges have since blocked the Trump administration’s funding freeze. The Shapiro lawsuit claims the federal government is continuing to withhold funds. The primary intent of the Shapiro lawsuit is to unfreeze federal funds for the following programs:

  • $750 million to reclaim abandoned mines
  • $354 million to plug orphan and abandoned wells
  • Approx. $129 million for DEP’s Home Electrification and Appliance Rebate (HEAR) Program
  • Approx. $129 million for DEP’s Home Energy Rebates (HER) Program
  • $186 million for home weatherization efforts coordinated by PA DCED
  • Approx. $400 million in funding for RISE PA (Reducing Industrial Sector Emissions)
  • $156 million for the Solar for All program

The PPA has been specifically focused on the state implementation of the HEAR and HER program which was established through the Inflation Reduction Act. The Home Electrification and Appliance Rebate (HEAR) Program provides up to $14,000 in rebates for low-to-moderate-income households. The HEAR program would offer rebates for electric heat pumps, water heaters, stoves, dryers, insulation, and building electrification upgrades. The program was set to roll out in February/March 2025 under the consumer-facing name Penn Energy Savers. The Home Energy Rebates (HER) Program is still in development with the intent of offering rebates to low-income multi-family households that reduce energy savings by 20%. That program was set to launch in Q2 or Q3 of 2025.

Pennsylvania did not operate a state-funded heat pump rebate program prior to the Inflation Reduction Act. To receive federal funding, Pennsylvania had to create a program and seek Department of Energy (DOE) approval. It is unclear how the current funding freeze will impact the long-term viability of the HEAR and HER programs. Governor Shapiro did include a proposal to separately fund heat pumps through the EDGE tax credit as a part of his 2025 Lightning Plan energy policy proposal. It would be anticipated that if enacted, the state funds would be directly layer into the federal program that DOE has already approved.