White House Said to Seek Deep Cuts to Clean Energy Division

(Bloomberg) -- The White House is seeking to cut hundreds of millions of dollars from the budget of an Energy Department division that has funded technological research in projects ranging from the LED light bulb to plug-in electric trucks, according to people familiar with the plans.

The Office of Energy Efficiency and Renewable Energy, currently funded at $2.1 billion a year, would see its allocation slashed by at least $700 million under a proposal from the Office of Management and Budget, according to three people briefed on the plans who asked not to be identified discussing the internal deliberations.

Scott Sklar, the chairman of the steering committee of the Sustainable Energy Coalition, said he's been told the goal could be even more severe: two-thirds of the office's budget, or $1.4 billion. The details were still under negotiation between the Energy Department and the White House and so the final figure could end up changing, Sklar said.

"It would be a very very significant cut," said Dan Reicher, who led the office during the Clinton administration. "Clearly this would have some very serious impacts on some very important programs."

The White House budget proposal is set to be released next week to Congress, which will then spend the coming months writing the government's spending blueprint.

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The proposed cuts come as President Donald Trump, who bashed wind and solar power on the campaign trail, seeks to boost defense spending by $54 billion while offsetting that spending with cuts from the rest of the government. Conservative groups, such as the Heritage Foundation, have called for the office to be eliminated entirely, saying energy innovation is best left up to the private sector.

"EERE's objectives boil down to using taxpayer dollars to purposefully distort energy markets by picking winners and losers," Jack Spencer, a vice president of Heritage and a former member of Trump's Energy department transition team, said in an email. "This should not be the role of government and Washington should have more faith in the American people." Spencer said he didn't have any direct knowledge of the budget plan for the agency.

Lindsey Geisler, a spokeswoman for the Energy Department, declined to comment. 

“The budget blueprint will be released in mid-March. It would be premature for us to comment – or anyone to report – on the specifics of this internal discussion before its publication," said OMB communications director John Czwartacki. "The president and his cabinet are working collaboratively as we speak to create a budget that keeps the president's promises.”

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The Energy Department program provides grants to companies trying to bring innovative technologies to the market. It has been credited with funding research to help make the cost of wind power competitive with coal, and cut the costs of LED lighting. It also backs more innovative technologies: It recently announced support for one plant's efforts to turn wastewater sludge into biogas and another to help make fuel from algae.

President Barack Obama increased funding for the office, and tried to boost it further. It's also responsible for setting the efficiency standards for household products ranging from refrigerators to microwave ovens.

Sklar, who leads a group that promotes renewable energy and energy efficiency, said the proposal was reminiscent of efforts under the administration of President Ronald Reagan.

"The same nonsense we heard back then we are hearing now: that these technologies are receiving an unfair share," he said in an interview.

Gutting the program would likely face opposition in Congress, as the agency contributes funding to Energy Department labs that are considered job creators in Republican and Democratic districts alike.

"Even though the new administration may propose cuts I think they will find there is a lot of support on both sides of the aisle," said John Mizroch, who served as acting assistant secretary for the program during President George W. Bush's administration. "Whatever is proposed will be subject to vigorous negotiation on the Hill."

--With assistance from Catherine Traywick and Jennifer A. Dlouhy

To contact the reporter on this story: Ari Natter in Washington at anatter5@bloomberg.net.

To contact the editors responsible for this story: Jon Morgan at jmorgan97@bloomberg.net, Mark Drajem