When the Department of Energy’s internal watchdog released a report last month alleging the Office of Clean Energy Demonstrations mismanaged a $6 billion grant program, it didn’t blindside those working on its deployment.
The agency’s inspector general concluded that OCED had failed to create standardized internal controls for the Advanced Industrial Facilities Deployment Program, a cost-sharing initiative for industrial retrofit and upgrade projects. Missing from the office’s work to establish the program, the report found, were things like standard risk assessments and performance plans for projects, as well as plans for mitigating conflicts of interest.
The result, the report concluded, was that OCED risked failing to meet the program’s stated objectives, and might overlook critical project performance issues.
One particular area of concern was the implementation and management of community benefit plans, which were a requirement for nearly all funding opportunities issued under the Biden-era Bipartisan Infrastructure Law and the Inflation Reduction Act — and which the Trump administration moved to rescind when it took office in January.
Now, there isn’t anything unusual — or inherently partisan — about the DOE inspector general auditing various programs within the agency and finding that they aren’t entirely meeting congressionally-mandated requirements. In fact, conducting such assessments is the core function of inspector general offices across the federal government, which were imposed by a law that dates back to the 1970s.
Despite the alignment of its findings with the Trump administration’s posture on community benefit plans, this particular OCED investigation was initiated during the Biden administration. It is one of several reports that began early in 2024 — when the November elections and eventual DOGE-run overhaul of the energy agency were nearly a year away — that the DOE inspector general’s office has released in recent weeks.
What differs from business-as-usual, however, is OCED’s response to the report, particularly given the Trump administration’s plans to eliminate the office altogether.
As is standard with such reports, the inspector general sent OCED leadership a draft of its findings and requested feedback from the professional staff there.
According to one former DOE official, who had visibility into OCED’s community engagement work and who spoke to Latitude Media on the condition of anonymity, staff responses to these responses are generally nuanced: “They’ll respond and say ‘we disagree with you on this, because this is what we’re doing’ or ‘we do kind of agree on this, here’s our plan to work on that.’” Those responses are then included in the final, public report that the inspector general’s office submits to Congress.
This time, though, the career staff’s responses to the report weren’t included in OCED’s response to the inspector general. Instead, the office submitted a single sentence comment: “We concur with the auditors’ findings.”
OCED leadership waived the standard “exit conference” with the inspector general in July, and instead said it would implement the inspector general’s recommendations — including agreeing to “develop, document, and implement” an internal control system, including systems to evaluate community benefits plans — by December 15, 2025.
But as former OCED employees pointed out, the brief response appears largely symbolic. By mid-December, the vast majority of the office’s career staff will have come to the end of their “deferred resignation” period, and moved on. The entirety of the team focused on project oversight will have left, and most of the projects that once counted on OCED funding will have turned elsewhere.
What the report got right
Community benefit plans in some form have been part of philanthropic grantmaking for several decades, but their use in federal grantmaking accelerated in the 2020s.
Programs funded by the BIL and IRA required applicants to explain in detail how they planned to ensure their projects were a positive addition to the communities they were building in. Those plans were designed around four of the government’s priorities at the time: community and labor engagement, workforce development, diversity, equity, and inclusion, and implementation of the Biden administration’s Justice40 Initiative. The last required that at least 40% of a federally-funded project’s overall benefits flow to disadvantaged communities.
The inspector general’s report commenting on CBP implementation at OCED landed amid political transition at DOE. Career OCED staff told Latitude Media they disagreed with how the Trump-appointed OCED leadership characterized the report’s findings when it was published: as evidence of “the green new scam.” But they acknowledged that some of the problems outlined in the report — including issues with community benefits plans, were accurate.
For example, the former DOE official said, the team in charge of community benefit plans “struggled” in part because the office didn’t have enough dedicated staff for the plans. But the bigger issue was that the concept was still somewhat new to DOE and the wider federal grant-making community.
OCED itself, tasked with deploying $25 billion in large-scale clean energy demonstration and commercialization projects, was only established in 2021. That meant policies and procedures were constantly under review and being updated. In other words, the former DOE official said, “we were building the plane as we were flying, because that’s just the nature of how authorizations and appropriations come out.”
OCED’s portfolio management group had “an excellent understanding of how you develop a project,” the former official said, “but CBPs are a pretty new thing, and we did see that that was something that we were going to have to work really hard on.” One of the office’s major goals for 2025 was figuring out “how we get more people at OCED able to do the type of oversight we need for these community benefits plans.”
Lack of oversight was central to the inspector general’s latest report, which found that OCED “did not develop a plan to track and evaluate the success” of those plans for the $5.8 billion Advanced Industrial Facilities Deployment Program.
Federal regulations required OCED to establish clear, program-wide metrics to assess projects. But when the office began issuing awards, it didn’t have those metrics in place yet, the report found, and was instead relying on projects to self-report progress against project-specific goals.
At OCED, proposed community benefits plans counted for 20% of a project’s technical merit score, considered alongside engineering, business development, permitting, and safety assessments. The plans had to be implemented and then evaluated at each of six project stages. And that created bottlenecks for fund disbursement, one former OCED employee who was directly involved with the awards told Latitude.
“The negotiations did take a long time because many of these organizations were very new to federal funding,” they acknowledged. But the CBP requirements “made it difficult for us to move the project forward without locking [community benefit plans] in…We kept raising these issues that the methodology was not thought out clearly.”
OCED’s grantmaking staff “believed in the idea that you have to support a community when you have a large construction project disrupt it, but not [in] a free giveaway,” they said. One problem, they added, was the way the plans were pitched to communities themselves. In some cases the plans were “sold and told to them that they could ask for anything, like a pool or a grocery store,” the former employee said — but OCED staff were “very uncomfortable” with benefits that were not directly connected to clean energy.
OCED’s fate
Despite the bipartisan nature of its creation, OCED has been marked for shutdown by the MAGA wing of the Republican party since before the November elections. Project 2025, the conservative policy blueprint from the Heritage Foundation, described OCED’s work as “green corporate welfare,” and asserted its efforts were “distorting energy markets.”
When the second Trump administration came into office in January, it moved quickly to address those criticisms, rescinding diversity, equity, and inclusion programs, community benefit requirements, and the Justice40 initiative within all of DOE’s programs. In March, when Elon Musk’s “Department of Government Efficiency” swept through the energy agency, OCED’s staff was slashed from more than 250 down to several dozen, and staff were told the office would be shut down by the end of the year.
In the wake of legal challenges, the agency resumed disbursements in March to projects whose contracts with the government required reimbursement for DEI-related activities. But OCED’s new leadership continued its campaign to wind down all Biden-era operations.
In the spring, the office started informing all recipients that they could voluntarily opt out of any previously agreed-to community benefit plans, and that the office wouldn’t be collecting or reviewing reporting related to those plans moving forward. Then, OCED began canceling awards, starting with $3.7 billion worth of smaller projects largely under the Industrial Demonstrations Program.
Now, former employees who spoke with Latitude Media said the word in the grantmaking community is that OCED is encouraging its remaining grant recipients to “drop out” of the program in exchange for a fee.
“It’s almost like what they did with the deferred resignation program,” the former official explained. “We’ll give a little bit of money if you are the one who resigned, but you can’t come back and complain about it.”
In the face of the Trump administration’s plans to dismantle OCED altogether, they said, the critiques of the community benefits plans, and office leadership’s response to the inspector general report, are somewhat moot.
“If community benefit plans were a problem, that entire oversight team all left, [and] the only people who are around are there to sort of close up shop,” they added. “I don’t see a future for OCED at all under this administration.”
In response to Latitude Media‘s request for comment for this piece, a DOE spokesperson issued the following statement: “The Department of Energy has not announced any formal plans for the Office of Clean Energy Demonstrations. The inspector general and Government Accountability Office have conducted four investigations of OCED funded programs during the last Administration. The current Administration has not interfered in any of the investigations with IG and GAO.”
Editor’s note: This story was updated on Sept. 2 with the addition of the response from DOE.
