President Donald Trump signed the executive order (EO) "Unleashing American Energy" on Jan. 20, 2025. In addition to laying out revised energy-related policy priorities, the EO required a temporary pause on the disbursement of funds made available under the Inflation Reduction Act (IRA) and Bipartisan Infrastructure Law.
On Jan. 27, 2025, the White House Office of Management and Budget (OMB) followed up with a memorandum directing all federal agencies to temporarily pause the obligation or disbursement of federal financial assistance.
Multiple lawsuits were filed, and OMB rescinded the memorandum the following day. Two separate temporary restraining orders (TROs) have now been issued, blocking implementation of the memorandum. Pursuant to the TROs and administration guidance posted to the U.S. Department of Energy (DOE) website, federal agencies, including the DOE, are prohibited from pausing or freezing funds or from terminating awards or obligations based on the OMB memorandum and EOs, including Unleashing American Energy. Importantly, there is no such prohibition on DOE's ability to exercise agency statutory and regulatory discretion, which in many instances is broad.
As a practical matter, clients are encouraged to pay special attention to meeting the terms of any award or loan agreements so that there is no reason government officials can use to delay payment or not proceed with an award. Administration actions will continue to evolve rapidly in the area of federal funding assistance, and Holland & Knight will continue to provide updates as the developments occur.
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