Transition Finance Weekly - 5/15/2025
FEMA Chief Ousted, IRA On the Line, Liberation in Naperville
SPOTLIGHT: The New GOP Tax Bill
Even with the details still falling into place, the GOP tax cut bill has the potential to do massive damage to the country. In addition to major Medicaid cuts and adding trillions to the deficit, the bill also could spell doom for clean energy by effectively killing the IRA.
Here’s how: The bill proposes sunsetting many key IRA provisions and tax credits, while also eliminating transferability early, a key financing mechanism for renewable energy developers.
This is a developing story, but there’s guaranteed to be a fight (including from IRA-friendly Republicans).
1. Naperville Considers Freeing Itself From Dirty Energy
All eyes are on the town’s IMEA contract.
Naperville, Illinois (with two new city council members) could be preparing to cut ties with the Illinois Municipal Electric Agency (IMEA) after the council missed the deadline to renew its 30-year contract. This would end Naperville’s energy reliance on Illinois’ biggest polluter, while freeing its budget from the constraints of an expensive and restrictive contract.
80% of IMEA’s power comes from coal. 49% is from the Prairie State Energy Campus (PSEC), a massive Illinois coal power plant it co-owns that holds the title of the state’s top emitter. The PSEC has been operating without permits for a decade, and faced massive cost overruns that are ultimately passed on to ratepayers.
Naperville accounts for almost a third of IMEA’s total load. If the city walks away, it could hurt IMEA’s credit rating — and send a broader signal that dirty, expensive coal isn’t the future.
2. Trump Ousts FEMA Chief for Standing By Agency
Message from his replacement: “I will run right over you.”
Trump fired Acting FEMA Administrator Cameron Hamilton for having the audacity to say, “I do not believe it is in the best interests of the American people to eliminate the Federal Emergency Management Agency,” failing to fall in line with Trump’s and DHS Secretary Kristi Noem’s plan to dismantle FEMA.
Hamilton was promptly removed and replaced by David Richardson, a former DHS staffer with no background in disaster relief. His primary qualification? Sharing Trump’s vision of FEMA’s future, or lack thereof. Richardson made headlines for his first message to staff: “Don’t get in my way… I will run right over you. I will achieve the president’s intent.”
We’ve been covering the fallout from Trump’s reckless politicization of disaster aid, and the many ways communities will be negatively impacted. But this latest development confirms a seemingly bleak future ahead for America’s disaster response infrastructure, right when people need it most.
Washington Sen. Patty Murray: “We have seen an upheaval at FEMA that is going to put lives in jeopardy. We are losing indispensable staff just weeks away from fire and hurricane season.”
3. Texas Solar Industry Pleads for Energy Incentives
Another counterweight against repealing the IRA enters the fray.
Last week, more than 50 Texas-based solar companies (manufacturers and developers) sent a letter to Congress with a clear ask: don’t repeal the federal clean energy tax credits powering our state’s solar surge. Ending these incentives, they said, could cost Texas over $50 billion in investment over the next decade.
Despite business and GOP support, the IRA could still face a full repeal. The coming fight over federal energy incentives will test just how far Republicans are willing to go to unwind a policy that’s creating jobs, attracting investment, and redefining the energy landscape.
The solar developers aren’t the only ones: some Congressional Republicans have warned multiple times against a repeal, who wrote that any repeal would “risk sparking an energy crisis.”
4. Trump’s Weird War on Energy Efficiency
His costly campaign against cheap, high-payoff initiatives continues.
At Trump’s direction, the EPA is moving to gut Energy Star, cut LIHEAP, and stall building efficiency standards, ending decades of money and energy savings.
Since 1992, Energy Star has saved Americans approximately $500 billion and 5 trillion kWh of electricity while helping to eliminate 4 billion metric tons of greenhouse gases.
These moves are at odds with Trump’s nominal goals to reduce energy prices, but he has had a long-term fixation on energy efficiency, railing against LED lights and water-efficient appliances.
Mark Kresowik, Senior Policy Director at the American Council for an Energy-Efficient Economy: “Energy efficiency is the best, fastest, cheapest way to lower energy costs. That’s something that, ostensibly, the Trump administration said they want to do.”
5. Cost of Carbon? Who Knows?
Trump orders federal agencies to stop counting.
The Trump administration has required federal agencies to stop estimating the cost of climate change in policymaking.
Under Obama, the imputed cost was set at $42 per ton of carbon. Biden raised it to $190. That cost is now effectively $0, giving agencies justification to gut emissions rules and ignore the economic and social costs of climate change, while giving the oil and gas industry yet another win.
But here’s the thing: Pretending pollution has no cost doesn’t make the damage or risk disappear. It just hides who’s really paying: people and the planet.
Michael Greenstone, an economist at the University of Chicago who conceived the idea of the social cost of carbon: “The decision is like Alice in Wonderland’s Humpty Dumpty, who said ‘Words can mean whatever I choose them to mean.’ So, yes, it is possible to have policies that assume climate change will have no impacts, but that does not make it so.”