Trump administration cancels nearly half-billion-dollar grant to Minnesota for power lines serving seven states

The U.S. Department of Energy is canceling 12 grants for energy projects in Minnesota, including a $464 million proposal to build large transmission lines in seven states, according to a list reviewed by the Minnesota Star Tribune.

The projects are part of $7.5 billion in Energy Department cuts announced by the Trump administration Wednesday largely in blue states as they pressure Democrats to vote for Republican plans to end a government shutdown.

A $70 million grant for an experimental long-duration battery system Xcel plans to use in Becker is on the termination list, which was provided by a Minnesota congressional office.

The Trump administration is also targeting a $50 million grant for Duluth-based Minnesota Power to modernize a transmission line, according to the termination list.

The Energy Department has not identified the projects, and did not respond to a request for information. Russell T. Vought, White House budget director, referred to the projects as part of a “Green New Scam funding to fuel the Left’s climate agenda,” in a post on the social media site X.

State officials said losing the transmission line construction project could lead to higher energy prices that would fall the hardest on middle- and low-income families.

The initial proposal for the $464 million grant was made by the Minnesota Department of Commerce, the nonprofit Great Plains Institute and the organizations that operate two regional electric grids.

Commerce has not received a formal notification of termination, said department spokeswoman Nancy Linden.

Linden said Commerce “is deeply concerned by the U.S. Department of Energy’s suggestion of an illegal effort to rescind federally obligated energy funds targeted exclusively at blue states.”

“If true, this would represent an unprecedented and politically motivated breach of federal law and funding norms — with potentially serious consequences for families, businesses and communities across Minnesota," she said.

Gov. Tim Walz told reporters on Thursday that “this whole idea that they see states as Democrats and Republicans, or they see areas as red or blue, is simply the most egregious violation of their oath.”

When it was awarded in 2023, the $464 million grant was billed as improving grid reliability, reducing bills and emissions, and would benefit red and blue states.

The transmission lines would also help power companies add more carbon-free power to the grid, and do it faster.

“Without these investments, Minnesota could face higher energy prices, slower infrastructure development and increased burdens on low- and middle-income households — all while demand for clean, affordable energy continues to grow," Linden said.

The Biden administration approved the Minnesota proposal in the fall of 2023, along with the Xcel battery money and Minnesota Power’s transmission line award.

A 2023 statement from the Commerce Department says a key component of the plan is to “ensure disadvantaged communities in the region would benefit from the energy infrastructure investments” and is part of an equity in energy initiative.

The Trump administration has pushed to stop projects aimed at improving racial equity.

“President Trump promised to protect taxpayer dollars and expand America’s supply of affordable, reliable and secure energy,” Wright said.

Xcel’s $70 million was split between Minnesota and Colorado for novel battery projects that would last longer than lithium ion batteries that are the current industry standard for large-scale energy storage systems.

The Trump administration has targeted other Minnesota energy projects, including a $62 million grant for small-scale solar projects.

In June, a federal judge said EPA had to restore $180 million in environmental justice funds it awarded to the Minneapolis Foundation and two other nonprofits.

Attorney General Keith Ellison also sued the EPA in March over $25 million in cuts to a state-run “green bank,” which loans money to developers, businesses and nonprofits for projects meant to benefit the environment and general public.