The Trump administration has eliminated a Biden-era program that would have pumped $125 million into Alaska to deploy solar power onto urban rooftops and into rural communities.

The Environmental Protection Agency said early this month that it's terminating the Solar for All program and clawing back grants, after the One Big Beautiful Bill Act ended its funding source.

But U.S. Sen. Lisa Murkowski's office suggested on Friday that the agency's termination of funding that's already obligated violates the bill's language. The decision also faces a threat of legal action from the Southern Environmental Law Center, a nonprofit advocacy group.

The $7 billion solar program, funded by the 2022 Inflation Reduction Act passed by Democrats, was designed to create solar projects nationwide, the agency said. The goal was lowering energy costs, boosting jobs in low-income and disadvantaged communities and combating climate change.

The Alaska Energy Authority and the Tanana Chiefs Conference had each won $62.5 million grants under the program to bring solar power to thousands of homes and dozens of communities in Alaska.

Curtis Thayer, executive director of the energy authority, said Thursday that the program's termination hurts efforts to reduce costly diesel fuel used in rural Alaska. The fuel is typically transported by barge to provide power in scores of villages.

"I think it is a missed opportunity because we need to displace fuel oil in rural Alaska," Thayer said, "whether that be (with) wind, solar, hydro, or even small nuclear. If we can just somehow offset the high cost of energy in rural Alaska, then we need to try to do that."

Thayer said the Alaska Energy Authority spent about $500,000 of the grant and will be reimbursed for that amount.

"We will be held harmless," he said. "Even our staff time in closing out the grant will be reimbursed."

Murkowski's office: EPA assurances not met

The Environmental Protection Agency explained in an Aug. 7 memorandum to the Alaska Energy Authority that it was canceling the grant it had obligated to the agency.

The federal agency said it was acting "pursuant to" the One Big Beautiful Bill Act, also known as the budget reconciliation bill, passed by Republicans in early July.

"Congress has made its intent clear — via a repeal of the statutory authorization and all appropriated funding for the program and the administrative burdens of implementing and overseeing the program — that the (Solar for All) program is no longer to operate," the agency said in the memo.

Murkowski joined her Alaska colleagues in voting for the bill, which contained unique provisions to benefit Alaska, such as potentially more oil development and revenue on production from federal lands.

But Joe Plesha, a spokesperson for Murkowski, said the senator does not agree with the environmental agency's decision.

"We disagree with EPA's termination of all obligated funding under the Solar For All program," Plesha said.

"The reconciliation bill explicitly rescinded unobligated balances and we had assurances from the agency through the morning of the announcement that no Alaska recipients would be harmed," he said.

"After an investigation and potentially litigation, we expect EPA to reverse course and reinstate previously obligated funds for this program," Plesha said.

Murkowski has previously complained that she felt "cheated" by the Trump administration on a concession in the bill she won to support wind and solar projects through a temporary, one-year retention of Biden-era tax credits.

U.S. Sen. Dan Sullivan and U.S. Rep. Nick Begich were unavailable for comment Friday about the Solar for All termination.

Solar for All could have helped dozens of communities

The Alaska Energy Authority planned to use about half the $62.5 million grant to deploy community projects in a handful of villages, Thayer said.

The agency was also working with the Alaska Housing Finance Corp., a state agency that would have used part of grant to subsidize residential solar installations, according to the energy authority.

In Interior Alaska, the Tanana Chiefs Conference planned to use its $62.5 million grant to create tribally led solar projects in communities, according to its website. The Interior tribal consortium planned to work in partnership with the Alaska Native Tribal Health Consortium and the state housing agency.

Representatives with the Tanana Chiefs Conference could not be reached for comment Friday.

The Alaska Public Interest Research Group asserted in a statement Friday that the cancellation of the grants is unlawful because the awards were obligated to recipients.

The termination will raise utility costs in Alaska, where communities face some of the highest energy prices in the U.S., said June Okada, federal infrastructure analyst for the consumer interest group.

The grant for the tribes alone could have served about 4,500 households in dozens of communities and delivered about $2.7 million in savings annually, Okada said.

The termination of Solar for All comes as the Trump administration has taken aggressive steps to eliminate funding for wind and solar projects nationally.

In recent months, multiple wind and solar projects have been canceled in Alaska, or face new challenges after the Big Beautiful Bill reduced the tax-credit window.

The halted or delayed projects will hurt energy diversification in Alaska and leave "a dangerous gap as Alaska faces a worsening natural gas shortfall," Okada said.

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