Efficiency Maine Trust and similar agencies in three other states accuse the Environmental Protection Agency of illegally blocking billions of dollars intended to help reduce greenhouse gas pollution in a lawsuit filed in federal court.
The agencies said the EPA's termination of $20 billion for lending to clean energy and efficiency programs was unlawful and unconstitutional.
The money, through the Greenhouse Gas Reduction Fund, was included in the Inflation Reduction Act approved by Congress during the Biden administration.
The complaint alleges that EPA Administrator Lee Zeldin made unsupported claims that the program is wasteful and fraudulent to support its termination.
State agencies further accused Citibank of breaching its contract with them by failing to pay out funds they requested from their awards. Funding for the program was deposited in the bank to be disbursed to a network of "green banks" across the country.
"Citibank has wrongfully withheld the award funds plaintiffs have an immediate right to possess," the states said.
The lawsuit was filed March 19 in a Washington D.C. federal district court. Efficiency Maine was joined in the case by the California Infrastructure and Economic Development Bank, Illinois Finance Agency and Minnesota Climate Innovation Finance Authority.
The complaint was filed after a federal judge blocked the EPA from terminating the program in a separate lawsuit brought by the Climate United Fund and other financial groups awarded money from the Greenhouse Gas Reduction Fund.
Efficiency Maine is unable to access $25 million held at Citibank, according to the complaint.
Executive Director Michael Stoddard said that having the funding frozen has caused some confusion in the marketplace and could chill activity by vendors and consumers.
The quasi-state agency offers rebates, loans and other incentives for energy efficiency home projects including insulation, weatherization and heat pumps.
Losing the funding will not have an immediate impact on the agency's programs and it has resources to continue offering rebates, Stoddard said in an email.
But its loan programs are likely to be disrupted if the federal funding is cut off entirely. The agency has enough money in a revolving loan fund to last the next year or so, Stoddard said. Unless it gets the financial infusion it expected, it would have to suspend loaning money until the fund is replenished with repayments, he added.
Losing the funding long term "could significantly undermine our ability to help Maine consumers access energy efficiency projects," Stoddard said.
Citibank and the EPA declined to comment, citing ongoing litigation.
