Commerce warns federal grant freezes threaten Minnesota energy projects; asks for $14.25M a year

Commerce officials told the Minnesota Senate Environment and Climate Committee on Feb. 17 that a sudden freeze of federal grants and competitive awards jeopardizes projects across the state and that the Department of Commerce is requesting $14,250,000 per year in state operating support in the governor's budget.

For the record, Grace Arnold, Commissioner of the Minnesota Department of Commerce, introduced the department's energy division presentation and Pete Wyckoff, Deputy Commissioner of Commerce for the Energy Division, outlined the agency's responsibilities and funding picture. Wyckoff said roughly a billion dollars in federal funding are currently under contract to the agency and that “as of the end of last week, all of that money is frozen.”

That funding supports a wide array of state programs and competitive awards, officials said. Wyckoff named several specific items that Commerce said are at risk if the federal funds do not flow: a $52,000,000 competitive tax-credit–style award to a Minnesota company expected to build a rare‑earth‑free magnet plant in Sartell; an $812,000,000 grant to Great River Energy; weatherization and home efficiency rebates; and other competitive awards the department has reserved or leveraged with state match dollars.

Why it matters: Commerce staff said the frozen funds are already under contract and that losing them would put projects, local matches and jobs at risk across Minnesota. “A contract is a contract. You don't get to pick and choose,” Wyckoff told the committee when…